FINANCIAL HIGHLIGHTS...Email : [email protected] website : Phone No. (02962) 257676 to...

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FINANCIAL HIGHLIGHTS(Rs.in Lacs)

ASSETS AND LIABILITIES

Gross Fixed Assets (Net of Revaluation) 53,517 47,529 43,433 33,949 25,134

Net Fixed Assets 36,255 33,090 31,915 24,452 17,038

Net Current and Other Assets 21,747 14,401 12,421 9,596 10,016

Equity Share Capital 1,308 1,308 1,308 1,251 777

Preference Share Capital 173 173 173 173 -

Reserves & Surplus (Excluding Revaluation Reserve) 10,131 7,622 6,945 6,463 5,299

Net Worth 11,439 8,931 8,253 7,714 6,076

Deferred Tax Liability 2,723 2,193 2,053 1,957 1,841

Secured Loans 42,424 35,406 33,207 23,039 17,682

Other Long Term Liabilities 2,444 2,039 1,758 1,866 1,803

@ Includes Interim dividend @ 15% .* Calculated after giving effect of issue of Bonus Shares during 2006-07.

BANSWARA SYNTEX LIMITED

RATIOSBook Value Per Share (Rs.) 87.45* 68.14* 62.97* 61.50* 50.76*

Earning Per Share (Rs.)- Basic 23.56* 7.29* 3.34* 12.02* 8.10*- Diluted 20.92* 7.29* 3.34* 11.39* 7.48*

TURNOVER AND PROFITS 2009-10 2008-09 2007-08 2006-07 2005-06

Turnover (Including Export) 64,683 55,895 45,154 41,343 34,495

Expor t s (Including Deemed Exports & Benefits) 41,113 36,644 28,152 25,694 21,218

Profit Before Interest, Depreciation & Tax 10,709 7,698 5,120 5,685 4,339

Interest 3,302 3,629 2,373 1,781 1,437

Profit Before Depreciation & Tax 7,407 4,069 2,747 3,904 2,902

Profit after Depreciation 4,334 1,129 567 2,278 1,571

Tax –Fringe Benefits - 30 29 23 26Current (Net of MAT Credit Entitlement) 716 - - 646 210Deferred 530 140 96 115 409

Profit after Tax 3,088 959 442 1,494 926

Dividend % 35@ 18 12 20 20

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ANNUAL REPORT 2009-2010

OFFICES

REGISTERED OFFICEIndustrial Area, Dohad RoadBANSWARA-327 001 (Raj.)Email : [email protected] : www.banswarasyntex.comPhone No. (02962) 257676 to 257681240690, 240691, 240693Fax No. (02962) 240692

HEAD/MARKETING OFFICE5th Floor, Gopal Bhawan,199, Princess Street,MUMBAI-400 002

DELHI OFFICEFlat No. 204,E-2, A.R.A. CentreJhandewalan Extn.NEW DELHI-110 055

JAIPUR OFFICEAnkur Apartments,S-6, Jyoti Nagar ExtensionJAIPUR-302 005 (Raj.)

PLANTSBanswara Uni t (Spinning, Weaving, Finishing& Madeups)Industrial Area, Dohad RoadBANSWARA –327 001(Raj.)

Daman Uni t (Garment)1. 98/3,Village Kadaiya

Nani DamanDAMAN –396 210 (U.T.)

2. Survey No. 713/1 ,713/2 ,713/3 ,725/2 &725/1 Village Dabhel , Nani Daman,DAMAN –396 210 (U.T.)

3. Survey No. 722/9Village Dabhel , Nani DamanDist.DAMAN –396 210 (U.T.)

Surat Uni t (Garment)Plot No. 5-6, G.I.D.C., Apparel ParkSEZ SachinSURAT – 394 230 (GUJARAT)

COMPANY INFORMATIONSBOARD OF DIRECTORSShri R.L. Toshniwal, Chairman & Managing DirectorShri Ravi Toshniwal, Joint Managing DirectorShri Rakesh Mehra, Wholetime DirectorShri Shaleen Toshniwal, Wholetime DirectorShri P. KumarShri D.P. GargShri S.B. AgarwalShri Vijay Kumar AgarwalShri Kamal Kishore KacholiaShri A.N. JariwalaShri Vijay MehtaDr. Shri R. Swaminathan, Nominee Director

EXECUTIVES

Shri S.S. Sajal, PresidentShri J.K. Rathi, President (Commercial)Shri J.K. Jain, Sr.Vice President (Finance & Commerce) & Company SecretaryShri S.N. Gupta, Senior Vice President (Technical)Shri S.S. Kella, Vice President (Audit & Taxation)Shri S.R. Jain, Vice President (Engineering )Shri Ashok Mishra, Vice President (Technical Worsted)

AUDITORS

M/s Kalani & Company, Chartered AccountantsMangal MargBapu NagarJAIPUR –302 004

BANKERS

Punjab National BankUnion Bank of IndiaBank of BarodaBank of India

REGISTRAR & SHARE TRANSFER AGENTM/s. Computech Sharecap Ltd.147, Mahatma Gandhi Road,Opp. Jehangir Art Gallery, FortMUMBAI-400 023Email:[email protected]:www.computechsharecap.comPhone No. (022)-22635000, 22635001

WE, BANSWARA SYNTEX LIMITED, WISH TO BE WORLD CLASS IN THE MANUFACTURE OF YARN & FABRIC. OUR ENDEAVOR IS TOANTICIPATE & EXCEED CUSTOMER SATISFACTION BY UNDERSTANDING CUSTOMER’S NEED AND EXPECTATION AND THUS,ENSURING QUALITY AND TIMELY DELIVERY BY :-

• BEING IN CLOSE CONTACT WITH CUSTOMERS AND GETTING THEIR FEED BACK.

• CONTINUOUS INNOVATION IN PRODUCT DEVELOPMENT.

• CONTINUAL IMPROVEMENT IN QMS & QUALITY THROUGH H.R.D., UPGRADATION OF PLANT & MACHINERY ANDIMPROVEMENT IN METHODS OF WORK.

• PARTICIPATION OF MANAGEMENT AND ALL EMPLOYEES AS ONE TEAM.

QUALITY POLICY

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PART – A(a) Housing : Free furnished residential accommodation with

gas, electricity, water, furnishing and maintenancecharges. If the Company does not provide residentialaccommodation, he will be paid such house allowanceas the Board may decide from time to time and expenseson gas, electricity, water, furnishing and maintenancecharges will be borne by the Company.

(b) Medical Reimbursement / Mediclaim Insurance :Reimbursement of expenses actually incurred, for self andfamily; the total cost to the Company shall not exceed onemonth’s salary per year or three months’ salary in a periodof 3 years. However, only those expenses will bereimbursed which have not been reimbursed in theMediclaim insurance policy, if any taken by the Companyfrom time to time.

(c) Leave Travel Concession : For self and family once in ayear; the total cost to the Company shall not exceed onemonth’s salary per year or three months’ salary in a periodof 3 years.

(d) Club Fees : Fees of clubs subject to a maximum of twoclubs except admission and life membership fees.

(e) Personal Accident Insurance : Premium not to exceedRs.10,000/- per annum.

(f) Servant allowance : Not exceeding Rs.60,000 per annum.

PART – BIn addition to the perquisites, Shri Shaleen Toshniwal shallalso be entitled to the following benefits, which shall not beincluded in the computation of ceiling on remunerationspecified under the Companies Act, 1956.(a) Provident Fund : The Company’s contribution to Provident

Fund as per the Rules of the Company.(b) Gratuity : Gratuity payable shall not exceed half month’s

basic salary for each completed year of service.(c) Leave : Leave and leave encashment as per Rules of the

Company.PART – C(a) Conveyance : Free use of the Company’s car with driver.

Personal use of car shall be billed by the Company.(b) Telephone : Free telephone facility at residence. Personal

long distance calls shall be billed by the Company.(c) R e i m b u r s e m e n t o f E x p e n s e s : Apart from the

remuneration as aforesaid, Shri Shaleen Toshniwal shallalso be entitled to reimbursement of such expenses asare genuinely and actually incurred in efficient dischargeof his duties in connection with the business of theCompany.

(d) S i t t i n g F e e e t c . : No sitting fee shall be paid toShri Shaleen Toshniwal for attending the Meetings ofBoard of Directors or any Committee thereof. He shallbe liable to retire by rotation.(iv)Wherein any financial year, the Company has no

profits or its profits are inadequate, the foregoingamount of remuneration and benefits shall be paid


NOTICENOTICE is hereby given that 34th Annual General Meeting ofthe shareholders of Banswara Syntex Limited, will be held onWednesday the day of 11th August, 2010 at its RegisteredOffice at Industrial Area, Dohad Road, Banswara (Raj.) at3.30 P.M. to transact the following business:ORDINARY BUSINESS1. To receive, consider and adopt the audited Balance Sheet

as at 31st March, 2010 and Profit and Loss account for theyear ended on that date and the reports of Directors andAuditors thereon.

2. To declare final dividend on equity shares and alsodividend on preference shares.

3. To appoint a Director in place of Shri Kamal KishoreKacholia who retires by rotation and, being eligible, offershimself for re-appointment.

4. To appoint a Director in place of Shri Vijay Mehta whoretires by rotation and, being eligible, offers himself forre-appointment.

5. To appoint a Director in place of Shri P. Kumar whoretires by rotation and, being eligible, offers himself forre-appointment.

6. To appoint the Auditors and to fix their remuneration.

SPECIAL BUSINESS7. Re-appointment of Shri Shaleen Toshniwal as Whole-

time Director.To consider, and, if thought fit, to pass, with or withoutmodification, the following resolutions as a SpecialResolution :“RESOLVED THAT pursuant to the provisions ofSection 198, 269, 309 and 310 read with ScheduleXIII and all other applicable provisions, if any, of theCompanies Act,1956 ( inc luding any statutorymodification(s) or re-enactment(s) thereof and subject tosuch approvals as may be necessary, the consent of theCompany be and is hereby accorded to the re-appointmentof Shri Shaleen Toshniwal as Whole-time Directorof the Company for a further period of 3 years from1st October, 2010 to 30th September, 2013 on terms andconditions, including remuneration, as set out below:(i) Salary : Rs.3,00,000 per month basic salary, which

shall be increased every year on 1 st Apri l byRs.25,000 in the scale of Rs.3,00,000-25,000 –3,75,000.

(ii) Commission : 1% commission on the net profit ofthe Company from 1 st April, 2010 onward, computedin the manner laid down as per schedule XIII of theCompanies Act, 1956.The commission will be paid subject to overall limitprescribed under the Companies Act, 1956 and afterpaying 1% commission to Shri R.L. Toshniwal,Chairman & Managing Director, another 1%commission to Shri Ravi Toshniwal, Jt. ManagingDirector and further 1% commission to Shri RakeshMehra, Whole-time Director of the Company.

(iii) Perquisites : The perquisites shall be as follows :

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to Shri Shaleen Toshniwal subject to the applicableprovisions of Schedule XIII of the said Act.“RESOLVED FURTHER THAT in the event of anystatutory amendment, modification or relaxation by theCentral Government to Schedule XIII of the CompaniesAct, 1956, the Board of Directors be and is herebyauthorized to vary or increase the remunerationincluding salary, commission, perquisites, allowancesetc. within such prescribed limit or ceiling and the saidagreement between the Company and Shri ShaleenToshniwal be suitably amended to give effect to suchmodification, relaxation or variation without any furtherreference to the members of the Company in generalmeeting.”

“RESOLVED FURTHER THAT Shri R.L. Toshniwal,Chairman & Managing Director, Shri Ravi Toshniwal,Joint Managing Director, Shri Rakesh Mehra, Whole-time Director and Shri J.K. Jain, Sr. Vice President (F&C)& Company Secretary of the Company be and arehereby individually authorized to take all such stepsas may be necessary and desirable for giving effect tothe above resolution.”

8. Increase in Authorized Share Capital of the Companyand alteration in the Memorandum of Association.

To consider and if thought fit, to pass, with or withoutmodification, the following resolution as an OrdinaryResolution:-

“RESOLVED THAT pursuant to the provisions of Section94 and all other applicable provisions, if any, of theCompanies Act, 1956, authorized share capital of theCompany be and is hereby increased fromRs.25,00,00,000/- (Rupees Twenty Five Crores) dividedinto 2,00,00,000 (Two Crores) Equity Shares of Rs.10/-(Rupees Ten) each and 5,00,000 (Five Lacs) RedeemablePreference Shares of Rs. 100/- (Rupees Hundred) eachto Rs.50,00,00,000/- (Rupees Fifty Crores) divided into4,50,00,000 (Four Crores Fifty Lacs) Equity shares ofRs.10/- (Rupees Ten) each and 5,00,000 (Five Lacs)Redeemable Preference Shares of Rs.100/- (RupeesHundred) each, ranking pari passu with the existing equityshares of the Company for the purpose of issue of sharesupon such terms and conditions and such rights andprivileges attached thereto as the Board may determine.

“RESOLVED FURTHER THAT pursuant to the provisionsof Section 16 and other applicable provisions, if any, ofthe Companies Act, 1956, the existing Clause V ofMemorandum of Association of the Company relating tothe share capital be and is hereby altered by deleting theexisting Clause and by substituting the followingClause V:

V : The Authorized Share Capital of the Company isRs.50,00,00,000/- (Rupees Fifty Crores) divided into4,50,00,000 (Four Crores Fifty Lacs) Equity shares ofRs.10/- (Rupees Ten) each and 5,00,000 (Five Lacs)


Redeemable Preference Shares of Rs.100/- (RupeesHundred) each, with power to Board of Directors toincrease the capital from time to time and divide theshares of the original or any increased capital intoseveral classes and to attach thereto respectively, suchpreferential, qualified or special rights, privileges orconditions as regards capital, dividend, voting right orotherwise as the regulations of the Company asoriginally framed or altered by special resolution fromtime to time.”

“RESOLVED FURTHER THAT the Board of Directors ofthe Company be and is hereby authorized to do all suchacts, deeds and things as may be necessary in the bestinterest of the Company for giving effect to the aforesaidresolution.”

9. Increase in Authorized Share Capital of the Companyand alteration in the Articles of Association.To consider and, if thought fit, to pass, with or withoutmodification, the following resolution as a SpecialResolution:-

“RESOLVED THAT pursuant to the provisions ofSection 31 and other applicable provisions, if any, ofthe Companies Act, 1956 including any statutorymodification(s) or re-enactment(s) thereof, for the timebeing in force, the existing Article 4 of the Articles ofAssociation of the Company relating to the share capitalbe and is hereby altered by deleting the same andsubstituting the following new Article 4: -

4 :The Authorized Share Capital of the Company isRs.50,00,00,000/- (Rupees Fifty Crores) divided into4,50,00,000 (Four Crores Fifty Lacs) Equity Shares ofRs.10/- (Rupees Ten) each and 5,00,000 (Five Lacs)Redeemable Preference Shares of Rs.100/- (RupeesHundred) each, with power to Board of Directors toincrease the capital from time to time and divide theshares of the original or any increased capital intoseveral classes and to attach thereto respectively, suchpreferential, qualified or special rights, privileges orconditions as regards capital, dividend, voting right orotherwise as the regulations of the Company asoriginally framed or altered by special resolution fromtime to time.”

“RESOLVED FURTHER THAT the Board of Directors ofthe Company be and is hereby authorized to do all suchacts, deeds and things as may be necessary in the bestinterest of the Company for giving effect to the aforesaidresolution.”

Registered Office : By Order of the BoardIndustrial Area, Dohad RoadBANSWARA-327 001 (Raj.)

J.K. JAINPlace : Mumbai Sr. Vice President (F&C)Date : 26th May, 2010 & Company Secretary

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NOTES :1. An explanatory statement pursuant to Section 173(2) of

the Companies Act, 1956 in respect of the specialbusiness is annexed hereto.

2. A MEMBER ENTITLED TO ATTEND AND VOTE AT THEMEETING IS ENTITLED TO APPOINT A PROXY TOATTEND AND VOTE INSTEAD OF HIMSELF AND THEPROXY NEED NOT BE A MEMBER OF THE COMPANY.Proxy, in order to be effective, should be duly stamped,filled and signed, must be deposited at the registeredoffice of the Company not less than 48 hours before themeeting.

3. M/s Computech Sharecap Limited is the Registrar andShare Transfer Agent (RTA) for physical shares and isalso the depository interface of the Company with bothCDSL and NSDL.

4. The Register of Members and Shares Transfer Book ofthe Company shall remain closed from 7 th August, 2010to 11th August, 2010 (both days inclusive) in connectionwith the payment of final dividend for the financial year2009-10.

5. Shareholders are requested to immediately notify to theCompany any change in their address.

6. The shareholders, who have not converted their sharesin demat form, are requested to do so.

7. The payment of dividend, upon declaration by theshareholders at the forthcoming Annual General Meeting,will be made on or after 16th August, 2010 as under:-

a) To all those beneficial owners holding shares inelectronic form as per the beneficial ownership data asmay be made available to the Company by NationalSecurities Depository Ltd. (NSDL) and the CentralDepository Services (India) Limited (CDSL) as of the endof the day on 6 th August, 2010.

b) To all those shareholders holding shares in physicalform after giving effect to all the valid share transfers lodgedwith the company before the closing hours on 6 th August,2010.

8. Members holding shares in physical form are advised tofurnish, on or before 26th July, 2010, particulars of theirbank account, if changed, to the Company to incorporatethe same in the dividend warrants.

In case of payments to the shareholders holding sharesin dematerialized form, particulars of bank accountregistered with their depository participants will beconsidered by the Company to incorporate the same inthe dividend warrants.

9. The Company has declared dividend for the years2002-03, 2003-04, 2004-05, 2005-06, 2006-07, 2007-08and 2008-09. It has also declared interim dividend for theyear 2009-10. The shareholders who have, so far, notencashed the dividend warrants are hereby informed toencash their dividend warrants by surrendering the samein original to the Company and get the demand draftsissued in lieu thereof. As per the provisions of theCompanies Act, the unpaid dividend after the expiry ofseven years from the date of declaration will be transferredto Investors’ Education and Protection Fund. Unpaiddividend for the year 2002-03 will be transferred to theabove fund in July, 2010. Please, therefore, encash theunclaimed dividend before it is transferred to above fund.

10. The Company is providing facility of Electronic ClearingServices (ECS) for payment of dividend to shareholdersresiding in selected Cities. Shareholders holding sharesin physical form are requested to provide details of theirbank account for availing ECS facility in the form beingforwarded with the Annual Report. However, if the sharesare held in dematerialized form, the ECS mandate has tobe communicated to the respective Depository Participant(DP). Changes, if any, in the details furnished earlier mayalso be communicated to the Company or DP, as the casemay be.

11. The documents referred to in the proposed resolutionsare available for inspection at the Registered office of theCompany during working hours between 10.00 A.M. and1.00 P.M. except on holidays.

12. Queries on accounts and operations may please be sentto the Company 7 days in advance of the Annual GeneralMeeting so that the answers can be made available at themeeting.

EXPLANATORY STATEMENT PURSUANT TO SECTION173(2) OF THE COMPANIES ACT, 1956

Item No.7

Shri Shaleen Toshniwal, aged 33 years, is B.Sc.(Management) from U.S.A and has over 6 yearsexperience in the field of textile industry. He is holding thepost of Whole-time Director in the Company for the last4 years. He is looking after the entire activities ofReadymade garment units at Daman and Surat. Hisremuneration is basic salary of Rs.2,00,000 in the scaleof Rs.2,00,000 – 25,000 – 2,75,000/- with perquisites asapproved by the shareholders in the Annual GeneralMeeting held on 8th August, 2007. The remunerationproposed to be paid to Shri Shaleen Toshniwal asrecommended by the Remuneration Committee andapproved by the Board is set out in the resolution.

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In the event of loss or inadequacy of profits in any financialyear during the tenure of the appointment, Shri ShaleenToshniwal shall, subject to the approval of the CentralGovernment, if required, be paid remuneration by way ofsalary and perquisites as set out above, as minimumremuneration, subject to restrictions, if any, set out inschedule XIII to the Companies Act, 1956, from time totime.

a) Job Profile

Shri Shaleen Toshniwal is looking after the entire activitiesof Daman and Surat plants of the Company includingproduction, exports and HRD functions.

Considering his skill, the Board is of the opinion that theservices of Shri Shaleen Toshniwal as Whole-time Directorare required to be availed for overall growth anddevelopment of the garment business and the Companyas well.

b) Comparative Remuneration in the Industry

No such data is available with the Company. But the Boardis of the view that the remuneration paid / to be paid by theCompany is in line with the excellent performance madeby the Company with his dedicated services.

c) Pecuniary relationship with the Company and othermanagerial persons in the Company

Shri Shaleen Toshniwal does not have any pecuniaryrelationship with the Company except the managerialremuneration drawn by him. He is Son of Shri R.L.Toshniwal, Chairman & Managing Director, Brother ofShri Ravi Toshniwal, Jt. Managing Director and Brother-in-law of Shri Rakesh Mehra, Whole-time Director of theCompany. Except this relationship and the remunerationproposed to be paid to Shri Shaleen Toshniwal, he doesnot have any pecuniary relationship with the Company orany other managerial person in the Company.

Shri Shaleen Toshniwal holds 1130913 Equity Shares ofRs.10/- each in the Company, as on date of this Notice.

None of the Directors except Shri Shaleen Toshniwalhimself and his relatives i.e. father, Shri R.L. Toshniwal,brother, Shri Ravi Toshniwal and brother-in-law,Shri Rakesh Mehra, are in anyway concerned or interestedin the above resolution.

This should be considered as an abstract of the terms ofre-appointment and payment of remuneration and amemorandum as to the nature of the concern or interest ofthe Directors as required under section 302 of theCompanies Act, 1956.

The Directors commend the above resolution for approvalby shareholders.

Item No. 8 & 9

In view of the Company’s proposal to expand its businessactivities, it is considered desirable to augment long termresources and to increase the capital inflow, which willhelp the Company to expand its capacity by modernizingits plant and machinery and diversifying its activities fromtime to time. Accordingly, it is proposed to increase theexisting Authorised Share Capital of the Company fromRs.25,00,00,000/- (Rupees Twenty Five Crores) dividedinto 2,00,00,000 (Two Crores) Equity Shares of Rs.10/-(Rupees Ten) each and 5,00,000 (Five Lacs) RedeemablePreference Shares of Rs.100/- (Rupees Hundred) eachto Rs.50,00,00,000/- (Rupees Fifty Crores) divided into4,50,00,000 (Four Crores Fifty Lacs) Equity Shares ofRs.10/- (Rupees Ten) each and 5,00,000 (Five Lacs)Redeemable Preference Shares of Rs.100/- (RupeesHundred) each.

Pursuant to the provisions of Sections 16, 31 and 94 ofthe Companies Act, 1956, any proposal to increase theAuthorised Share Capital requires the approval ofmembers of the Company. Consequent to the increase inthe Authorised Share Capital, it is necessary to alter theCapital Clause of the Memorandum of Association andthe Articles of Association of the Company. The OrdinaryResolution in Item No. 8 and the Special Resolution inItem No. 9 seeks to make corresponding alterations inClause V of the Memorandum of Association and Article 4of the Articles of Association of the Company to give effectto the above.

None of the Directors are interested in the aforesaidresolutions except to the extent of shares that may beallotted to them in future.

The Directors commend the passing of the aboveResolutions.

The copy of current and proposed Memorandum ofAssociation and Articles of Association is available forinspection at the Registered office of the Company duringits working hours on all working days.

Registered office : By Order of the Board

Industrial Area, Dohad RoadBANSWARA-327 001 (Raj.)

J.K. JAIN

Place : Mumbai Sr.Vice President (F&C)Date : 26th May, 2010 & Company Secretary


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DIRECTORS’ REPORTDear Shareholders,Your Directors are pleased to present the 34th Annual Reportof the Company together with its Audited Accounts for theyear ended 31st March, 2010.

FINANCIAL REVIEW(Rs. in Lacs)

This year Previous year2009-2010 2008-2009

Gross Income 64,683 55,895Net Income 63,097 54,894Profit before extra-ordinary items,depreciation & tax 6,799 4,822Profit before depreciation & tax 7,407 4,069Less: Depreciation 3,073 2,939Profit before tax 4,334 1,129Tax on Income 1,246 170

(a) Current Tax 736 128(b) Deferred Tax 530 140(c) Fringe Benefit Tax - 30

1,266 298 Less : MAT Credit Entitlement 20 128Profit after Tax 3,088 959Balance brought forward 536 608Profit available for appropriation 3,623 1,567Appropriations :Interim Dividend and Tax thereon(paid during the year) 230 -Proposed Final Dividend 300 241Tax on Dividend 50 41Transfer to General Reserve 2,000 750Balance Carried to Balance Sheet 1,044 536Earning Per Share (Rs) : Basic 23.56 7.29

Diluted 20.92 7.29

OPERATIONSDuring the year 2009-10, your Company’s performancerealed new heights, both in terms of gross income and prof-itability. The net income from operations during the year atRs.631 crores went up by 15% over Rs.549 crores achievedin 2008-09. The production of yarn increased by 11%, fab-rics by 15% and garments by 45%. The Company also startedproduction of technical fabrics during the year. There is goodscope for further increase in production all along the valuechain.Profit before depreciation and tax for the year 2009-10 atRs.7,407 lacs recorded in impressive growth of 82% overRs.4,069 lacs of 2008-09. The profit before tax and net profitfor the year worked out to Rs.4,334 lacs and Rs.3,088 lacs,i.e. up by 284% and 222% respectively over the previousyear. The Company has paid Rs.736 lacs as income tax be-sides providing Rs.530 lacs as deferred tax liability for theyear under report.The basic and diluted Earning Per Share (EPS) for the year2009-10 works out to an all time high of Rs.23.56 andRs.20.92 respectively.

EXPORTSDuring the year 2009-10, the export turnover at Rs.36,674lacs as against Rs.32,759 lacs during 2008-09, recorded anincrease of 12% mainly due to increase of 15% in yarn ex-ports. The Company has increased production and export ofreadymade garments and as such the export growth in gar-ments was more than 48% over the year 2008-09.During the year under report, your Company added few moreimportant customers of world repute. The Company’s mar-keting as well as, design and development teams partici-pated in the international trade fairs to acquaint themselveswith the latest market trends and acquire better understand-ing of the customers requirements. The Company has de-veloped a design studio for fabrics and garments to boostthe export sales by introducing new designs. It is continu-ously making efforts to attract the new customers domesti-cally and internationally.

DIVIDENDThe Company has already paid interim dividend ofRs.1.50 per equity share in January, 2010. Your Direc-tors are now pleased to recommend final dividend ofRs.2.00 per equity share. Thus, the total dividend isRs.3.50 per equity share (previous year- Rs.1.80 perequity share) of Rs.10/- each of the Company. The divi-dend payout for the year would aggregate Rs.490.85 lacsbesides dividend tax of Rs.82.29 lacs. The Company hasalso paid 3% dividend on preference shares.

INCREASE IN SHARE CAPITALDuring the year 2009-10, the Company issued 16,50,000warrants on preferential basis to persons other than promot-ers @ Rs.41 per warrant based on the prevailing rules andregulations.The Board of Directors, in its meeting held on 27th April, 2010has converted these warrants into an equal number of equityshares, as per the terms of issue of these warrants. Accord-ingly, the equity share capital of the Company has increasedto 1,47,56,361 equity shares of Rs.10/- each.

EXPANSION, DIVERSIFICATION AND MODERNIZA-TIONDuring the year under review, the Company has added fixedassets of Rs.4,585 lacs besides-the-capital work-in-progressof Rs.828 lacs and advances to capital goods suppliers ofRs.1,622 lacs as at 31.03.10. These expenses were incurredon expansion, diversification and modernization of all theareas of its operations viz. spinning, weaving, finishing andreadymade garments.The Company has made investment of Rs.2,280 lacs in spin-ning for modernization and replacement of spindles, Rs.447lacs on fabric weaving for replacing 20 looms, and Rs.951lacs on fabric processing facility adding various value add-ing machines suitable for technical fabrics and increase inthe processing capacity by about one million meter a monthbesides Rs.907 lacs in readymade garments division for 4additional lines for trousers and 1 line for production of Jack-ets at Daman and Surat.The total production capacity of the Company as at31st March, 2010 for yarn production is 133588 ring spindles,including 14400 spindles for worsted yarn spinning, 576 airjet spindles, 190 shuttleless looms, 12 air jet jacquard looms,5 stenters with processing capacity of 4 million meters a month


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and 2.50 lac pieces of garments per month.The Company has arranged the requisite funds for the expan-sion, diversification and modernization schemes through termloans from banks and financial institutions as well as plough-ing back of internal accruals of the Company. The term loansavailed during the year aggregate Rs.3,541 lacs out of whichRs.2,964 lacs were under TUFS.The Company’s ongoing expansion plan i.e. 2 nd unit of cap-tive Thermal Power Plant of 15/18 MW capacity and increasein production capacities in all the areas of its operations isunder implementation. Further capital outlay expected during2010-11 is Rs.90 crores. The means of financing the samehave been fully tied up.

JOINT VENTUREThe Joint Venture Company Carreman Fabrics India Ltd., hasa fabric weaving plant of 60 Rapier Looms. Your Companyhas 50% stake in JV’s equity share capital. The JV Companymanufactures fabric on job work basis for your Company, thetotal production during the year 2009-10 being 65.65 lacmeters as against 62.35 lac meters in the year 2008-09. TheJV Company earned net profit of Rs.46.87 lac during 2009-10as against Rs.95.22 lac in the previous year; the shortfall inprofitability is attributed to increasing power maintenance andemployees cost.

POWER PLANTThe 1st unit of captive Thermal Power Plant of 15/18 MW ca-pacity is working satisfactorily. The Company’s power require-ment has increased on account of expansion of capacity ofvarious division at Banswara over the years. The Company isin the process of installation of 2 nd unit of coal based ThermalPower Plant of the same capacity, which is expected to be-come operational in the last quarter of the current financialyear, 2010-11. The Company has also signed a fuel supplyagreement for purchase of coal from South Eastern CoalfieldsLtd. The availability of Indian Coal at Government supplyrates will reduce the cost of power generation. The Govern-ment coal supply is expected to commence from June/July,2010.

FINANCEDuring the year 2009-10, the Company availed term loansaggregating Rs.3,541 lacs from Banks and Financial Institu-tions. It also received increase in need based working capitalfrom all the bankers of the Company.

CONTRIBUTION TO EXCHEQUERDuring the year, your Company contributed Rs.2,478 lacs tothe Government Exchequer by way of Excise Duty, ServiceTax, Value Added Tax (VAT), Income Tax, Dividend Distribu-tion Tax and other payments.

SUBSIDIARY COMPANYThe Company did not have any subsidiary as on 31st March, 2010.However, it has 50% stake in equity capital of Carreman Fab-rics India Ltd., a Joint Venture Company between BanswaraSyntex Ltd. and Carreman, France.

CORPORATE GOVERNANCE / MANAGEMENTDISCUSSION & ANALYSIS REPORTAs per Clause 49 of the Listing Agreements with the Stock

Exchanges, the Company has adopted a Code of Conductapplicable to the members of the Board and senior manage-ment. The Company fully complies with the Corporate Gover-nance practices as enunciated in the Listing Agreements;Corporate Governance Report and Management Discussion& Analysis Report are annexed and marked Annexure-I, whichform part of this report.

FIXED DEPOSITSThe Company has not issued any advertisement inviting fixeddeposits from the public. However, it continues to accept de-posits from public. As on 31st March, 2010, the Company hadsuch deposits aggregating Rs.743.17 lacs. Deposits whichmatured during the year were either renewed or repaid. Allthe interest and principal dues are being paid regularly. TheCompany has duly complied with the provisions of the Com-panies (Acceptance of Deposits) Rules, 1975.

DIRECTORSAppointment of Shri Shaleen Toshniwal as a Whole-time Di-rector is expiring on 30th September, 2010. The Board of Di-rectors, in its meeting held on 27 th April, 2010 hasre-appointed Shri Shaleen Toshniwal as Whole-time Directorfor further period of 3 years from 1st October, 2010 to30th September, 2013. Necessary resolution for appointmentof Shri Shaleen Toshniwal shall be placed before the share-holders at the forthcoming Annual General Meeting for theirapproval.In accordance with the provisions of Articles of Association ofthe Company, Shri Kamal Kishore Kacholia, Shri Vijay Mehtaand Shri P. Kumar, Directors, are retiring by rotation and, be-ing eligible, offer themselves for re-appointment.

DIRECTORS’ RESPONSIBILITY STATEMENTAs required under Section 217(2AA) of the Companies Act,1956, with respect to Directors’ Responsibility Statement, it ishereby confirmed that :I. In the preparation of the annual accounts for the year

ended 31st March, 2010 the applicable Accounting Stan-dards have been followed and the Notes to the Accountsare self-explanatory.

II. The Directors have selected such Accounting Policies andapplied them consistently and made judgements and es-timates, that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company asat 31st March, 2010 and of the profit of the Company forthe year ended on that date.

III. The Directors have taken proper and sufficient care forthe maintenance of adequate accounting records in ac-cordance with the provisions of the Companies Act, 1956,for safeguarding the assets of the Company and for pre-venting and detecting frauds and other irregularities.

IV. The Directors have prepared the annual accounts of theCompany for the year ended 31st March, 2010 on a goingconcern basis.

AUDIT COMMITTEEIn accordance with the requirement of Clause 49 of the List-ing Agreements with Stock Exchanges, the Board has consti-tuted the Audit Committee which presently comprises threeindependent Directors viz. Shri P. Kumar, (Chairman), Shri


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Kamal Kishore Kacholia and Shri S.B. Agarwal as members.The composition, role, functions and powers of the Audit Com-mittee are in accordance with the applicable laws and theListing Agreements with the Stock Exchanges.

AUDITORSM/s. Kalani & Company, Chartered Accountants, Jaipur, holdoffice as the Auditors of the Company until the conclusion ofthe ensuing Annual General Meeting and are eligible forre-appointment. They have furnished a Certificate to the effectthat the re-appointment, if made, would be within the pre-scribed limits under Section 224(1-B) of the Companies Act,1956.

AUDITORS’ REPORTAs regards Auditors’ observations, the relevant Notes on ac-count are self-explanatory and, therefore, do not call for anyfurther comments, except in the matter of non payment of Ser-vice Tax and Cess thereon of Rs.23.44 lacs and disputed li-abilities of Rs.11.75 lacs towards the excise duty andRs.403.61 lacs towards entry tax. While the matter pertainingto Excise duty refunds taken by the Company are under ap-peal with Joint Secretary, Govt. of India, Service Tax demandwith CESTAT, New Delhi and Entry Tax is pending with Hon’bleHigh Court, Rajasthan.These liabilities will be met if necessary on final decision ofthe respective Appellate Authorities.

ENERGY CONSERVATION, TECHNOLOGY AB-SORPTION & FOREIGN EXCHANGE EARNINGSAND OUTGOInformation pursuant to the provisions of Section 217 (1) (e) ofthe Companies Act, 1956, in relation to conservation of en-ergy, technology absorption, foreign exchange earnings and

outgo, in accordance with the Companies (Disclosure of Par-ticulars in the Report of Board of Directors) Rules, 1988 isannexed and marked Annexure ̀ II’, which forms part of thisreport.

DEMATERIALIZATION OF SHARESIn pursuance of SEBI / Stock Exchange directions, your Com-pany offered demat option to its esteemed shareholders soas to enable them to trade the shares in the demat form. Inresponse, 95.60% shares have been converted into dematform up to 31st March, 2010. The stock code number in NSDLand CDSL for equity shares of the Company is ISIN – INE 629D01012.

PARTICULARS OF EMPLOYEESDuring the year under report, the relations between theCompany’s management and its staff/workers continued toremain cordial. The Directors place on record their deep ap-preciation of the devoted services of the workers, staff and theexecutives.As required by the provisions of Section 217(2A) of the Com-panies Act, 1956, read with the Companies (Particulars ofEmployees) Rules, 1975, as amended, the particulars of em-ployees of the Company who were in receipt of remunerationof Rs.2,00,000/- per month or more are annexed and markedAnnexure ‘III,’ which forms part of this report.

ACKNOWLEDGEMENTYour Directors wish to express their grateful appreciation forthe co-operation and assistance extended by the financialinstitutions, banks, various Central & State Government De-partments, Customers and Suppliers during the year underreview. The Directors thankfully acknowledge the continuoussupport and guidance of all the shareholders and, more im-portantly, for the confidence reposed in the Company’s man-agement.

For and on behalf of the BoardPlace : Mumbai R.L. TOSHNIWALDate : 26th May, 2010 Chairman & Managing DirectorANNEXURE -I TO THE DIRECTORS' REPORT

CORPORATE GOVERNANCE REPORTThe Company adheres to good corporate practices and is constantly striving to improve by adopting emerging best practices.“Corporate Governance” is the system by which companies are directed, controlled and managed. The Corporate Governancestructure specifies the demonstration of the role and responsibilities of different participants in the organization, such as, theBoard, managers, shareholders and other stakeholders. It also spells out the rules and procedures for decision making oncorporate affairs.I. COMPANY’S PHILOSOPHYBanswara Syntex Limited is committed to the best governance practices and their adherence in the true spirit at all times. TheCompany is committed to maintain the highest level of transparency, accountability and equity in its operation. It firmly believesthat Corporate Governance is about the management and conduct of an organization based on ethical business principles andcommitment to values. It is intended to ensure attractive returns to all stakeholders of the business based on the belief thatsound Corporate Governance is pre-requisite to sustain, strengthen and enhance the investors’ trust. Corporate Governanceis a set of principles, processes and systems to be followed by the directors, executives and all employees of the Company forenhancement of shareholders’ value while complying with the provisions of law in all dealings with Government, customers,suppliers, employees and other stakeholders.

The Company has complied with the provisions of the Code of Corporate Governance as per Clause 49 of the ListingAgreements with the Stock Exchanges. A report on the implementation of the provisions of the Corporate Governance isfurnished hereunder.


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II. BOARD OF DIRECTORSThe Board of Directors of Banswara Syntex Limited is a balanced one with an optimum mix of Executive and Non-ExecutiveDirectors. The present 12 members Board of the Company includes one Managing Director and three Whole-time Directors,all from the promoter group, and eight Non-executive Independent Directors, including a Nominee Director of EXIM Bank.Thus, constituted 2/3rd of the Board’s strength Independent Directors. The Non-executive Independent Directors are eminentprofessionals with long experience in business, industry, finance and public enterprises. The Independent Directors are notrelated to the promoter-Directors. The Board provides leadership, strategic guidance, objective analysis and independentviews to the Company’s management while discharging its fiduciary responsibilities, thereby ensuring that the managementadheres to high standards of ethics, transparency and accountability.The Directors do not have any pecuniary relationship with the Company except to the extent of the following:(a) Managing /Whole-time Directors - Remuneration as per their terms of appointment and reimbursement of

expenses actually incurred for the business of the Company, within theapproved terms and conditions.

(b) Non-executive Independent Directors - Reimbursement of expenses and payment of sitting fees for the Board/Committee meetings attended by them.

Eight Board meetings were held during the year 2009-10 i.e. on 30th April, 2009, 29th May, 2009, 18th July, 2009, 30th July, 2009,29th August, 2009, 31st October, 2009, 5 th January, 2010 and 19th January, 2010. The frequency and quorum etc. at thesemeetings were in conformity with the provisions of the Companies Act, 1956. All the Board members and the senior managementpersonnel have affirmed compliance with the Code of Conduct as on 31st March, 2010.

A. Composition of the Board of Directors as on 31.03.2010 and attendance at the Board/ Committees meetings during the year:

ED- Executive Director, NEID- Non Executive Independent Director

* Up to 24.06.2009-expired on 25.06.2009

B. Board ProcedureThe members of the Board are provided with the requisite information mentioned in the Listing Agreements well before theBoard meetings.The Board considers all the matters which are statutorily required to be considered by it. In addition, following issues are alsodiscussed at the meetings of the Board :• Annual operating and capital expenditure budgets and periodical review thereof.• Investment/expansion/modernization/diversification plans of the Company.• Overall strategy and business plans.• Approval of quarterly/half-yearly/annual results (after review by Audit Committee).• Compliance with statutory/regulatory requirements and review of major pending legal cases.• Foreign exchange exposure and risks.• Major accounting practices, provisions and write-offs.• Transactions pertaining to acquisition/disposal of fixed assets and related parties.• Review of working of various Committees of the Board.• Issues regarding mergers and amalgamations, joint ventures, collaborations, etc. with any other Company/entity.

Name of theDirectors

Attendanceat last AGM

No. of Boardmeetingsattended

Category ofDirector

No. of directorshipin other Public

LimitedCompanies

No. of other BoardCommittees

of which Member /Chairman

Shri R. L. Toshniwal Yes 8 ED 3 1Shri Ravi Toshniwal Yes 7 ED 2 -Shri Rakesh Mehra Yes 8 ED 1 -Shri Shaleen Toshniwal No 7 ED - -Shri D.S. Alva* No Nil NEID 2 -Shri P. Kumar Yes 8 NEID 1 4Shri A.N. Jariwala No 4 NEID 2 1Shri Kamal Kishore Kacholia No 7 NEID 1 -Shri Vijay Mehta No 6 NEID 5 -Shri D.P. Garg No 4 NEID 1 -Shri S.B. Agarwal No 6 NEID 3 5Shri Vijay Kumar Agarwal No 4 NEID 2 -Dr. Shri R. Swaminathan No 7 NEID 1 -(Nominee Director of EXIM Bank)


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• Significant labour problems, if any.• General industrial environment and developments related to textile industry, in particular.All the Directors, who are members of the various committees, are within the limits prescribed in the Listing Agreements. TheDirectors have intimated, from time to time, about their directorship/membership of committees in other companies.

Details of Shareholding of Directors as on 31st March, 2010

Sr. No. Name of Director Number of Shares 1. Shri R.L. Toshniwal 10,40,054 2. Shri Ravi Toshniwal 9,06,447 3. Shri Rakesh Mehra 25,499 4. Shri Shaleen Toshniwal 11,30,913 5. Shri Vijay Mehta 20

The Company has not issued any shares/debentures to the promoters during the year.

III. COMMITTEES OF THE BOARDCurrently there are four Committees of the Board viz. Audit Committee, Remuneration Committee, Shareholders’ GrievancesCommittee and Share Transfer Committee. The Committees appointed by the Board focus on specific areas and takeinformed decisions within their delegated authority. The Committees also make specific recommendations to the Boardon various matters from time-to-time. Matters requiring the Board’s attention/ approval are generally placed before theBoard by the respective Committee’s chairman. The role and composition of these Committees including the number ofmeetings held during the financial year, and the related attendance are provided below:

A. AUDIT COMMITTEEOBJECTIVE :The Audit Committee has been constituted as per Section 292A of the Companies Act, 1956 and the guidelines set outin the Listing Agreements with the Stock Exchanges. The management is responsible for the Company’s internalcontrols and the financial reporting process while the statutory auditors are responsible for performing independentaudits of the Company’s financial statements in accordance with the generally accepted auditing practices and forissuing reports based on such audits. The Board of Directors has constituted the Audit Committee which assists theboard in its responsibility for overseeing the quality and integrity of the accounting, auditing and reporting of thecompany and its compliance with the legal and regulatory requirements. The Committee’s purpose is to oversee theaccounting and financial reporting process of the Company, the audits of the Company’s financial statements, theappointment, independence and performance of the statutory auditors, the internal auditors and the Company’s riskmanagement policies. The Committee monitors the pending litigation against the Company as well as show causenotices received from various authorities The Audit Committee also reviews the periodic internal and statutory auditors’reports.Minutes of meetings of the Audit Committee are circulated to members of the Committee and placed before the Boardfor its confirmation.

COMPOSITION :The Audit Committee comprises 3 Non-executive Independent Directors viz. Shri P. Kumar (Chairman), Shri KamalKishore Kacholia and Shri S. B. Agarwal.

MEETINGSSix meetings of the Audit Committee were held during the year 2009-10 i.e. on 30th April, 2009, 29th May, 2009,30th July, 2009, 31st October, 2009, 5 th January, 2010 and 19th January, 2010.The frequency and quorum, etc. at these meetings were in conformity with the provisions of the Companies Act, 1956as also the Listing Agreements with the Stock Exchanges.

ATTENDANCEThe attendance of the members at these meetings was as under :

Name of the Member Meet ing (s) held (No.) No. of meet ings at tendedShri D.S. Alva* 2 2Shri P. Kumar 6 6Shri Kamal Kishore Kacholia 6 5Shri S.B. Agarwal** 5 2

• Up to 24.06.2009-expired on 25.06.2009** Appointed w.e.f 29.05.2009


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Members of the Audit Committee have requisite financial and management expertise and hold /have held seniorpositions in reputed organizations.At the invitation of the Committee, representatives of various departments of the Company besides the Chairman &Managing Director, Whole-time Director-in-charge of finance function, Statutory Auditors, Internal Auditors, Sr. VicePresident (F&C) & Company Secretary who also acts as the Secretary to the Committee, attend the Audit Committeemeetings to answer the queries if any and clarify the points raised at the meetings and generally assist the Committeein its deliberations.

ROLE OF AUDIT COMMITTEE

The role and terms of the reference of the Audit Committee cover the matters specified under Clause 49 of the ListingAgreements as also the provisions of Section 292A of the Companies Act, 1956.

POWERS OF AUDIT COMMITTEE :-Powers of the Audit Committees inter alia, include.i) To investigate any activity within its terms of reference.ii) To seek information from any employee.iii) To obtain outside legal or other professional advice.iv) To secure attendance of outsiders with relevant expertise, if considered necessary.

B. REMUNERATION COMMITTEE

The Remuneration Committee has been constituted as per requirement of Clause 49 of the Listing Agreements andother applicable provisions of the Companies Act, 1956.The terms of reference of the Committee are:-• To review, assess and recommend to the Board, the appointment of Executive/Whole-time Directors and the

remuneration payable to them besides the quantum of sitting fees payable to Non-Executives IndependentDirectors.

• To consider and recommend human resource polices relating to compensation and performance of the keymanagement personnel.

The terms of appointment of senior executive drawing monthly remuneration of Rs.2,50,000 and above are alsoapproved by the Remuneration Committee.

The remuneration paid to the Whole-time Directors is recommended by the Remuneration Committee to the Board ofDirectors and shareholders of the Company.

COMPOSITION :

The Remuneration Committee comprises 3 Non-Executive Independent Directors, viz. Shri P. Kumar (Chairman),Shri D.P. Garg and Dr. Shri R. Swaminathan.

MEETINGS

During the year 2009-10, no meeting of the Committee was held.

C. SHAREHOLDERS’ GRIEVANCES COMMITTEE

The Shareholders’ Grievances Committee is empowered to perform all the functions in relation to handling ofshareholders’ grievances.

The Committee primarily focuses on:• Review of investor complaints and their redressal.• Review and consideration of the queries received from the investors and• References, if any, received from SEBI/Stock Exchanges.COMPOSITION :

The Shareholders’ Grievances Committee Comprises 3 Non-Executive Independent Directors, viz. Shri P. Kumar(Chairman), Shri Kamal Kishore Kacholia and Shri Vijay Mehta.

The Board has also designated Shri J.K. Jain, Sr. Vice President (F&C) & Company Secretary, as the ComplianceOfficer of the Company for the purpose of investors’ complaints/grievances.

MEETINGS

During the year 2009-10, no meeting of the Committee was held as all the eight complaints received from theshareholders/investors during the year were promptly resolved to the satisfaction of the complainants.


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DISPOSAL OF COMPLAINTS

The shareholders’ complaints are being promptly attended to and disposed off well within one month of the receiptthereof. Details of the complaints received and resolved during the year are as under:-

D. SHARE TRANSFER COMMITTEEThe Share Transfer Committee looks into the shareholders’ requests for transfer of shares, transmission of shares,etc. held in physical form.The Committee’s primarily focus is :• To scrutinise the share transfer application forms received by the Company and, if found in order in all respects,

to register transfers of shares in the Register of Members of the Company,• To register various documents as mentioned above in the Register of Documents maintained by the Company,• To approve the issue of split share certificates and new share certificates in place of defaced, torn, damaged and

soiled share certificates on receipt of proper applications and other required papers and documents from theshareholders,

• To sign the share certificates and to affix the Company’s Common Seal on them in accordance with the provisionsof the Companies Act, 1956, the Companies (Issue of Share Certificates) Rules, 1960 and those of the Articlesof Association of the Company, and

• To take all other consequential and incidental actions and measures.

COMPOSITION :The Share Transfer Committee comprises 3 members, viz. Shri R.L. Toshniwal, (Chairman), Shri P. Kumar andShri D.P. Garg.

MEETINGSDuring the year 2009-10, 19 meetings of Share Transfer Committee were held. Two members constitute the quorumfor each meeting. The meetings were held i.e. on 1 st April, 09,16th April, 09, 2 nd May, 09,16th May, 09, 18th June, 09,1st August, 09,1st September, 09,16th September, 09, 1 st October, 09, 16th October, 09,17th November, 09, 1 st December,09,16th December, 09,1 st January, 10, 16th January, 10,1 st February,10, 19th February,10, 2nd March, 10 and17th March, 10.

ATTENDANCEThe attendance of the members at these meetings was as under:-

Name o f Member Meet ing (s) held (No.) No. of meet ings at tended

Shri R. L. Toshniwal 19 19Shri P. Kumar 19 19Shri D.P. Garg 19 14

IV. DETAILS OF REMUNERATION PAID TO DIRECTORS FOR THE YEAR 2009-101) Appointment and the terms thereof, of Shri R.L. Toshniwal, Chairman & Managing Director, has been approved by

the shareholders for 3 years from 1 st August, 2009 to 31st July, 2012.2) Appointment and the terms thereof, of Shri Ravi Toshniwal, Jt. Managing Director, has been approved by the

shareholders for 5 years from 24th August, 2007 to 31st July, 2012.3) Appointment and the terms thereof, of Shri Rakesh Mehra, Whole-time Director, has been approved by the shareholders

for 5 years from 1 st October, 2008 to 30th September, 2013.

4) Appointment of Shri Shaleen Toshniwal, Whole-time Director is expiring on 30th September, 2010. The Board ofDirectors, has in its meeting held on 27th April, 2010 re-appointed Shri Shaleen Toshniwal for further 3 years from1st October, 2010 to 30th September, 2013. The resolution for re-appointment of Shri Shaleen Toshniwal is being putup before the shareholders in ensuing Annual General Meeting for their approval.

Nature of Complaint

No. ofcomplaintsnot repl ied

at beginningof the year

No. ofcomplaints

receiveddur ing

the year

No. ofcomplaints

attendeddur ing

the year

Range of No.of days taken to

reply the complaints( i f i t exceeds 15

days, pls. specify)

No. ofcomplaints

not resolvedat the endof the year

If Pendingfor reply

No. ofdays

pending

Non-receipt of Dividend 0 4 4 <15 days 0 0Non- receipt of Shares 0 4 4 <15 days 0 0lodged for transfer/ exchangeOthers 0 0 0 Not applicable 0 0

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The remuneration to Executive/Whole-time Directors is paid as determined/recommended by the Remuneration Committeeand Board of Directors and as finally approved by the Shareholders in their meeting. Non- Executive Independent Directors arebeing paid Sitting fee @ of Rs.10,000/- for each meeting of the Board of Directors or any Committee thereof except that, in caseof Share Transfer Committee meetings, sitting fee is Rs.2,500/- per meeting. The remuneration paid to each Director during theperiod from 1 st April, 2009 to 31st March, 2010 is as under :-

( i ) Execut ive Directors (Rs. in Lacs)

Sr. No. Name of Director Salary

1. Shri R.L. Toshniwal 45.00 58.672. Shri Ravi Toshniwal 37.31 58.90

3. Shri Rakesh Mehra 36.58 59.204. Shri Shaleen Toshniwal 30.14 53.44

* Including provision for commission payable Rs.47.93 Lacs each

(ii) Non-Executive Independent Directors (Rs. in Lacs)

Sr. No. Name of Director

1. Shri D.S. Alva* 0.20 2. Shri P. Kumar 1.88 3. Shri A.N. Jariwala 0.40

4. Shri Kamal Kishore Kacholia 1.20 5. Shri Vijay Mehta 0.60

6. Shri D.P. Garg 0.75 7. Shri S.B. Agarwal 0.80 8. Shri Vijay Kumar Agarwal 0.40

9. Dr. Shri R. Swaminathan, Nominee Director of EXIM Bank 0.70

* Up to 24.06.2009-expired on 25.06.2009

V. ANNUAL GENERAL MEETINGSLast 3 Annual General Meetings of the Company were held as under :

Financial Year Date Time Venue

2008-09 17th Aug., 2009 4.00 P.M. Regd. Office : Indl. Area, Dohad Road, Banswara –327 001 2007-08 13th Sept., 2008 4.00 P.M. Regd. Office : Indl. Area, Dohad Road, Banswara –327 001 2006-07 8th Aug., 2007 4.00 P.M. Regd. Office : Indl. Area, Dohad Road, Banswara –327 001

Special resolutions passed in the last 3 AGMs : The details of special resolutions passed during last 3 years i.e. 2007,2008 & 2009 are as under :-

Sr. No. AGM held on Special Resolution Passed

1. 08.08.2007 1. Re-appointment of Shri Ravi Toshniwal as Jt. ManagingDirector

2. Revision in remuneration payable to Shri R. L. Toshniwal,Chairman & Managing Director

3. Revision in remuneration payable to Shri Rakesh Mehra,Whole-time Director.

4. Revision in remuneration payable to Shri Shaleen Toshniwal,Whole-time Director.

2. 13.09.2008 1. Re-appointment of Shri R. L. Toshniwal as Chairman &Managing Director.

2. Re-appointment of Shri Rakesh Mehra as Whole-time Director.

3. 17.08.2009 1. Generation, dealing and distribution of electricity.2. Issue of warrants on preferential basis.


Perquisites*( including PF & Commission)

Amount

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POSTAL BALLOT

No postal ballot was conducted during in the year 2009-10. As on date, the Company does not have any proposal to passany resolution by the way of postal ballot.

VI. DISCLOSURES1. Disclosure on materially significant related party transactions that may have potential conflict with the interests

of Company at large.The Company has entered into certain transactions with its Promoters, Directors and the Management related partiesin the ordinary course of business, but these transactions do not have any potential conflict with the interests of theCompany at large. The Company has complied with mandatory requirements of Clause 49 of the Listing Agreementswith the Stock Exchanges.

2. Details of non-compliance by the Company, penalties, and strictures imposed on the Company by StockExchanges or SEBI, or any other statutory authority, on any matter related with the capital market.

No penalties or strictures have been imposed on the Company by the Stock Exchanges or SEBI or any other statutoryauthority on any matter related to the capital market, during the year.

VII. MEANS OF COMMUNICATIONQuarterly Results : Quarterly and half yearly results are published in Hindi & English newspapers viz: Rajasthan Patrika,Dainik Bhaskar, The Financial Express, Jansatta and Economics Times.

News Releases : Information released to the press at the time of declaration of results is also being sent to BSE and NSE,where the shares of the Company are listed.

Media : Interviews of Managing Director and Joint Managing Director regarding working of the company are conductedby fairly, regularly by print as well as electronic media and published/broad cast/telecast at lines.

Periodicals : Company’s news and details appear in financial papers, journals etc.

Annual Report : Annual Report containing, inter alia, Audited Annual Accounts, Directors Report and other importantinformation is circulated to members, Management Discussion and Analysis form part of the Annual Report, which isposted to all the shareholders of the Company.

Website : The Company has a website with the name www.banswarasyntex.com which contains information regardingthe shareholding pattern of the Company, investors update, history of the Company, the Company’s products, itsachievements and various other important news and information related to the Company’s work and current events.

VIII. GENERAL SHAREHOLDER INFORMATION1. 34th Annual General Meeting (to be held)

Date : 11th August, 2010Time : 3.30 P.M.Venue : Industrial Area, Dohad Road, Banswara – 327 001 (Raj.)

2. Financial Year ( Tentative Calendar of events )Financial Year : April 1, 2010 to March 31, 2011.First Quarter Results 15th August, 2010Second Quarter/ half yearly results & Limited Review 15th November, 2010Third Quarter Results & Limited Review 15th February, 2011Audited Annual Results (2010-11) May, 2011

3. Date of Book Closure

The register of members and share transfer books of the Company shall remain closed from 7th August, 2010to 11th August, 2010 (both days inclusive).

4. Dividend Payment Date (Tentative)

Final Dividend for the year 2009-10, if approved by the shareholders, will be paid on or after 16th August, 2010.

5. Listing of Equity Shares on Stock ExchangesThe Company’s Shares are listed on :

(i) Bombay Stock Exchange Ltd., Mumbai (BSE)Phiroze Jeejeebhoy Towers, Dalal Street,Mumbai- 400 001


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(ii) National Stock Exchange of India Ltd., Mumbai (NSE).“Exchange Plaza”, Bandra-Kurla Complex,Bandra (E), Mumbai- 400 051

The requisite listing fees have been paid for the year 2010-11 to both the Stock Exchanges.

6. Stock Code

Number in NSDL and CDSL for equity shares - ISIN – INE 629 D01012Bombay Stock Exchange Ltd., Mumbai - 503722National Stock Exchange of India Ltd., Mumbai - BANSWRAS

7. Stock Market Price Data

Monthly high/low market prices of the Company’s equity shares traded on Bombay Stock Exchange Ltd., Mumbaiand National Stock Exchange of India Ltd., Mumbai, during the last financial year are as follows :-

April, 2009 23.75 16.00 23.45 15.70May, 2009 45.30 22.50 45.45 24.05June, 2009 57.50 40.90 57.75 41.60July, 2009 52.65 37.00 51.95 37.20August, 2009 54.75 47.15 54.20 47.95September, 2009 69.45 47.45 69.75 47.70October, 2009 78.85 60.55 78.60 60.25November, 2009 66.70 59.10 67.00 61.15December, 2009 95.70 64.80 95.85 63.85January, 2010 125.70 90.00 125.40 90.60February, 2010 117.35 89.40 117.25 89.00March, 2010 118.50 94.75 118.40 94.00

8. Performance of Company’s Shares in comparison to BSE & NSE

9. Registrar & Share Transfer AgentM/s. Computech Sharecap Limited(Unit: Banswara Syntex Ltd.)147, Mahatma Gandhi Road,Opp. Jehangir Art Gallery,Fort, MUMBAI-400 023Tel: 022-22635000-01, Fax: [email protected] : www.computechsharecap.com

10. Share TransfersSince the Company’s shares are traded in the dematerialized form on the Stock Exchanges, bulk of the transferstakes place in the electronic form.

For expediting transfers, the Company has appointed a common agency, M/s. Computech Sharecap Limited, 147,Mahatma Gandhi Road, Opp. Jehangir Art Gallery, Fort, Mumbai-400 023, for effecting transfers for the shares held

Month BOMBAY STOCK EXCHANGE LTD. NATIONAL STOCK EXCHANGE OF INDIA LTD.High (Rs.) Low (Rs.) High (Rs.) Low (Rs.)

120

100

80

60

40

20

0

6000

5000

4000

3000

2000

1000

0

20000

18000

16000

14000

12000

10000

8000

6000

4000

2000

0

120.00

100.00

80.00

60.00

40.00

20.00

0.00

BS

E S

EN

SE

X

BS

L C

losi

ng

pri

ce o

n B

SE

BS

L C

losi

ng

pri

ce o

n N

SE

CN

X N

IFT

Y

Performance BSL share price in comparison to NSE NIFTYPerformance BSL share price in comparison to BSE SENSEX

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in both the demat as well as physical form. The Board has delegated the function related to physical transfers to theShare Transfer Committee, which is later confirmed by the Board. Physical transfers are effected within one month.The Board has designated the Company Secretary as the Compliance Officer. The Company obtains, from a CompanySecretary in practice, half-yearly certificate of compliance with the share transfer formalities as required under clause47(c) of the Listing Agreements and files a copy of the certificate with the Stock Exchanges.i. Shareholding Pattern as on 31st March, 2010

Sr. Category No. ofNo. Shares held

1. Promoters 7804284 59.552. Mutual Funds and UTI 4925 0.043. Banks, Financial Institutions, Insurance 695 0.01

Companies (Central/ State Govt. Institutions,Non-Government Institutions)

4. Foreign Institutional Investors - -5. Private Corporate Bodies 1338630 10.216. Indian Public 3602728 27.487. NRIs/OCBs /Foreign Nationals 355099 2.718. GDR - -

Grand Total 13106361 100.00

• The Company has issued 16,50,000 warrants on preferential basis to the persons other than promoters @ Rs.41/-per warrant. The issue price includes premium of Rs.31/- per warrant. The Board of Directors on 27th April, 2010 hasconverted these warrants into an equal number of Equity Shares. Accordingly the equity share capital of the companyhas increased to 1,47,56,361 Equity Shares.

ii. Distribution of Shareholding as on 31st March, 2010(a) Number-wise

No. of Shares No. of % of Share No. of VotingShareholders holders shares held Strength (%)

1 to 500 9974 89.80 1018371 7.77501 to 1000 543 4.89 426712 3.26

1001 to 2000 251 2.26 381453 2.912001 to 3000 98 0.88 249841 1.913001 to 4000 54 0.49 189941 1.454001 to 5000 45 0.41 208406 1.59

5001 to 10000 52 0.47 391098 2.9810001 & above 89 0.80 10240539 78.13

Total 11106 100.00 13106361 100.00

(b) Category-wise

Category Number of Shareholders Number of Shareholdingshareholders (%) Shares held (%)

Physical 4616 41.56 576937 4.40Electronic 6490 58.44 12529424 95.60

Total 11106 100.00 13106361 100.00

11. Re-appointment of Directors(a) Whole-time Director

Tenure of appointment of Shri Shaleen Toshniwal, Whole-time Director is expiring on 30th September, 2010. TheBoard of Directors in its meeting held on 27th April, 2010 has reappointed Shri Shaleen Toshniwal for further periodof 3 years from 1 st October, 2010 to 30th September, 2013. The Resolution for re-appointment of Shri ShaleenToshniwal is being put up before the shareholders in Annual General Meeting for their approval.Brief particulars of Shri Shaleen Toshniwal, Whole-time Director are given below :-Shri Shaleen Toshniwal, Whole-time Director, aged 33 years, is B.Sc. (Management) from U.S.A. and has over 6years experience in the textile industry. He is holding the post of Whole-time Director for the last 4 years. He is lookingafter the entire activities of Readymade Garment units at Daman and Surat.


Percentage ofShareholding (%)

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ANNUAL REPORT 2009-2010Name of Public Limited Companies in which Shri Shaleen Toshniwal is Director :

Sr. No. Name of the Company 1. Nil

Name of Public Limited Companies in which Shri Shaleen Toshniwal is Member/Chairman of any Committee.Sr. No. Name of the Company

1. Nil(b) Non-executive Director

Three Non-executive Independent Directors are due for retirement by rotation at the ensuing Annual General Meetingand are eligible for re-appointmentBrief particulars of the Directors retiring by rotation are given below :-1) Shri Kamal Kishore Kacholia, Aged 59 years, Industrialist, is on the Board of the Company for the last 29 years.

Shareholding in the Company is NIL.Name of Public Limited Companies in which Shri Kamal Kishore Kacholia is Director :-

Sr. No. Name of the Company1. NTB Bowsmith Irrigation Ltd.

Name of Public Limited Companies in which Shri Kamal Kishore Kacholia is Member/ Chairman of any Committee :-Sr. No. Name of the Company

1. Nil

2) Shri Vijay Mehta, Aged 57 years, Consultant, is on the Board of the Company for the last 29 years. Shareholdingin the Company is 20 shares.

Name of Public Limited Companies in which Shri Vijay Mehta is Director :-Sr. No. Name of the Company

1. Mefcom Securities Ltd.2. Mefcom Capital Markets Ltd.3. Mefcom Commodity Brokers Ltd.4. Mefcom Infrastructure Projects Ltd.5. Jaipur Stock Exchange Ltd.

Name of the Public Limited Companies, in which Shri Vijay Mehta is Member/ Chairman of any Committee.Sr. No. Name of the Company

1. NIL

3) Shri P. Kumar, Aged 73 years, a retire Bank executive, is on the Board of the Company for the last 9 years.Shareholding in the Company is NIL.

Name of Public Limited Companies in which Shri P. Kumar is Director :-Sr. No. Name of the Company

1. N.R. Agarwal Industries Ltd.Name of Public Limited Companies in which Shri P. Kumar is Member/Chairman of any Committee.

Sr. No. Name of the Company1. N.R. Agarwal Industries Ltd.

12. Relationship among DirectorsExcept as detailed below, other Directors do not have any relationship with each other.Sr. No. Name of Director Relationship

1. Shri R.L. Toshniwal 1. Shri Ravi Toshniwal and(Chairman & Managing Director) Shri Shaleen Toshniwal - Sons

2. Shri Rakesh Mehra - Daughter’s Husband2. Shri Ravi Toshniwal 1. Shri R.L. Toshniwal - Father

(Joint Managing Director) 2. Shri Shaleen Toshniwal - Brother3. Shri Rakesh Mehra - Sister’s Husband

3. Shri Shaleen Toshniwal 1. Shri R.L. Toshniwal - Father(Whole-time Director) 2. Shri Ravi Toshniwal - Brother

3. Shri Rakesh Mehra - Sister’s Husband

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13. Dematerialization of shares and liquidity

The Company’s shares are available for dematerialization on both the Depositories viz. National Securities DepositoryLimited (NSDL) and Central Depository Services (India) Limited (CDSL).Shares of the Company are to be delivered compulsorily in the demat form on Stock Exchanges by all investors.Shares representing 95.60% of the Paid-up Capital have so far been dematerialized by Investors.

14. Outstanding GDRs / ADRs / Warrants and Convertible Instruments

The Company has issued 16,50,000 warrants to persons other than promoters on preferential basis on 18th July,2009, convertible into Equity Shares of the company. These warrants has converted into an equal number of EquityShares by the Board of Directors on 27th April, 2010.

15. Plant Locations

1. Banswara Syntex Ltd. Industrial Area, Dohad RoadBanswara Syntex Ltd. Unit – BTM Banswara-327 001 (Rajasthan)Banswara Syntex Ltd. Unit - BFLBanswara Syntex Ltd. Unit - BJF

2. Banswara Syntex Limited 98/3, Village KadaiyaReadymade Garment Unit - I Nani Daman“Banswara Garments” Distt. DAMAN-396 210 (U.T.)

Readymade Garment Unit – II Survey No.713/1, 713/2, 713/3, 725/2 and 725/1“Banswara Garments” Village Dabhel, Nani Daman

Dist. Daman-396 210 (U.T.)

Readymade Garment Unit – III Survey No.722/9“Banswara Garments” Village Dabhel, Nani Daman

Dist. Daman-396 210 (U.T.)

3. Banswara Syntex Limited Plot No. 5 & 6, GIDC Apparel ParkBanswara Apparel. SEZ Sachin

SURAT – 394230 (Gujarat)

16. Registered OfficeIndustrial Area, Dohad Road, BANSWARA-327 001 (Raj.)

17. Address for correspondenceThe Company has appointed M/s. Computech Sharecap Limited as Common Agency for share registry work both forelectronic and physical mode of shares.

Shareholders can make correspondence at the following addresses for share transfer matters and other grievances,if any :-(a) Mr. Patrick A. Butelho

M/s. Computech Sharecap Limited.(Unit: Banswara Syntex Ltd.)147, Mahatma Gandhi RoadOpp. Jehangir Art GalleryFort, MUMBAI-400 023

(b) Registered Office:Industrial Area, Dohad Road,Banswara – 327 001 (Raj.)

18. Non-Mandatory Requirements under Clause 49 of the Listing Agreements1. Remuneration Committee : The Company has Remuneration Committee and the details of which are provided

in this report under section ‘Committees of the Board’.2. Shareholder’s rights : The Quarterly Financial results as per clause 41 of the Listing Agreements are published

in newspapers. The complete Annual Report is sent to every shareholder of the Company.

3. Audit Qualifications : Company always endeavors to present unqualified financial statements. There is no auditqualification in the Company’s financial statements for the year ended 31st March, 2010.

4. Training of Board members : Directors are fully briefed on all business related matters, risk assessments andnew initiatives proposed by the Company. Directors are also kept informed about the changes in the domestic/


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global corporate and industry scenario including those pertaining to statutes/legislation and economicenvironment.

5. Whistle Blower Policy : The Company encourages an open door policy where employees have access to thehead of business/function. In terms of “Banswara Syntex Limited Code of Conduct”, any instance of non-adherenceto the code/any other observed unethical behaviour is to be brought to the attention of the immediate reportingauthority, who shall report the same to the authority who has the final say in these matters.

IX. CODE OF CONDUCTThe Code of Conduct for the Directors and the Senior Management of the Company has been laid down by the Board andthe same is posted on the website of the Company.

CEO/ CFO CERTIFICATIONCertificate from CEO/ CFO for the financial year ended 31st March, 2010.

We, R. L. Toshniwal, Chairman & Managing Director and Chief Executive Officer, and Rakesh Mehra, Whole-time Directorand Chief Financial Officer, of Banswara Syntex Limited certify:

1. That we have reviewed the financial statements and the cash flow statement for the year ended 31st March, 2010 andthat to the best of our knowledge and beliefa. These statements do not contain any materially untrue statement nor omit any material fact nor contain statements

that might be misleading, and

b. These statements present a true and fair view of the Company’s affairs and are in compliance with the existingaccounting standards, applicable laws and regulations.

2. That there are, to the best of our knowledge and belief, no transactions entered into by the Company during the year,which are fraudulent, illegal or violative of the Company’s Code of Conduct;

3. That we accept responsibility for establishing and maintaining internal controls, we have evaluated the effectivenessof the internal control systems of the Company and we have disclosed to the auditors and the Audit Committee,deficiencies in the design or operation of internal controls, if any, of which we are aware and the steps that we havetaken or propose to take to rectify the identified deficiencies and ;

4. That we have informed the auditors and the Audit Committee of :

a. Significant changes in internal controls during the year;b. Significant changes in accounting policies during the year and that the same have been disclosed in the notes

to the financial statements; andc. Instances of significant fraud of which we have become aware and the involvement therein, if any, of the management

or an employee having a significant role in the Company’s internal control system.

Place : Mumbai R.L. TOSHNIWAL RAKESH MEHRADate : 26th May, 2010 Chief Executive Officer Chief Financial Officer

AUDITORS' CERTIFICATE ON CORPORATE GOVERNANCEThe Company has obtained a Certificate from Auditors regarding compliance of conditions of Corporate Governance asstipulated in the Listing Agreements with the Stock Exchanges. The said Corporate Governance Certificate is annexed tothis report.

For BANSWARA SYNTEX LIMITED

Place : Mumbai R.L. TOSHNIWALDate : 26th May, 2010 Chairman & Managing Director


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MANAGEMENT DISCUSSION AND ANALYSISDisclaimerThe shareholders are hereby cautioned that this discussionand analysis mainly comprises statements that involvepredictions based on risks and uncertainties. It is the sumtotal of the Company’s expectations, beliefs, estimates andprojections, which may be termed as “forward looking” withinthe meaning of the existing laws. These are the management’sperceptions and the actual results may differ materially fromthose expressed specifically or implied. The major factorswhich could affect the perception and projections are thechanges in the Govt. regulations, demand and supply of theproducts, fluctuation in foreign currency exchange rates, etc.The shareholders are cautioned not to place undue relianceon these statements and should caution themselves whileconsidering these statements for any decision making orformation of an opinion. This should be read in conjunctionwith the Company’s financial statements.The core business of the Company is manufacturing andmarketing of synthetic blended yarn, wool and wool mix yarn,synthetic and worsted spun fabrics, readymade garments andmadeups. The Company has also started production oftechnical fabrics. The Company perceives good scope forincrease in production and sale for this kind of fabrics.

a) Industry Structure, its Development and OpportunityThe Indian Textile Industry was stagnant during the period1996-2000 and hardly any worthwhile investment wasmade during this period. The Government, in 2000 startedthe Technology Upgradation Fund (TUF), which allowedinterest subsidy of 5% simultaneously, the interest rates

in general also came down and, therefore, financebecame available at interest rate ranging between 4 and6 percent per annum. This allowed the industry to expandits capacity very substantially.Bulk of this investment has gone into expansion ofspinning capacity in the wake of increased cottonproduction in India coupled with the profitable nature ofthe activity. However, the spinning industry was too muchdependent on export of cotton to china and othercountries on the contrary Indian yarns became moreexpensive on account of Rupee appreciation. Chinaalso expanded its own capacity as such, the Spinningcapacity of Indian Textile Industry became surplus.Simultaneously, the World recession also started and2008 & 2009 saw many textile mills suffering on accountof this Mills incurred huge losses on account of suddenRupee appreciation which also resulted in many millslosing considerable money. However, with the Rupeeonce again becoming attractive, the Indian industry hasstarted looking up and, now, the Indian textile industry isagain full of enthusiasm in expectation of increasedprofitability.Investment is now being made in weaving andprocessing segment’s; simultaneously, garmentingindustry is also expanding to avail the benefit of valueaddition.Textile is the 2 nd largest employment generating industryin the country. Therefore, the Government is continuouslyextending support for growth of this segment. The IndianTextile Industry is poised for big growth in the wake ofthe following positive factors:

C E R T I F I C A T E

To the Members of Banswara Syntex Limited,BanswaraWe have examined the compliance of conditions of Corporate Governance by Banswara Syntex Limited for the year ended on31st March, 2010 as stipulated in Clause 49 of the Listing Agreements of the said Company with the Stock Exchanges.The Compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limitedto a review of the procedures and implementation thereof adopted by the Company for ensuring the compliance with theconditions of the Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of theCompany.In our opinion and to the best of our information and according to the explanations given to us, and the representations madeby the Directors and the management, we certify that the company has complied with the conditions of Corporate Governanceas stipulated in Clause 49 of the above-mentioned Listing Agreements.

We state that no investor grievance is pending for a period exceeding one month against the Company as per the recordsmaintained by the Shareholders' Grievances Committee.We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency oreffectiveness with which the management has conducted the affairs of the Company.

For KALANI & COMPANYChartered Accountants

FRN - 00722C

K.L. JHANWARPlace : Mumbai PartnerDate : 26th May, 2010 M.No.14080

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1) India has surplus production of cotton and with thenew policy of Government in which cotton exportsare discouraged and value added products arepreferred, is a positive factor for Indian textile industry.

2) Comparatively low cost of labour in India and otherAsian countries may attract more and more textilebusiness from developed countries to this region.

3) India is fast becoming a preferred destination forseveral global brands for sourcing their requirementsin the textile and apparel segments.

4) Indian textile industry is now known for betterdesigns, colours and new products besides a flexibleproduct mix which gives the customer an exclusiverange.

5) Stable political climate, trade friendly economic lawsand growing economy of India inspires confidenceamong the foreign buyers.

6) The availability of dyed viscose in the countryenables the Indian industry to offer a wider range ofvarieties of the products.

7) Growing fashion consciousness all over will widenthe market for the speciality designed products bothwithin and outside the country.

The positive factors as above can be expected to drivethe industry towards a positive growth. However, whileconsidering these, it would be unfair to overlook theimpact of fluctuating exchange rate i.e. USD against INR,volatile crude oil and coal prices, non-availability oftrained manpower mainly for garment business andunpredictable nature of demand for supply position ofthe textile products.

b) Overview of the Company’s performanceDuring the year under review, the Company has addedfixed assets of Rs.4,585 lacs besides the capital work-in-progress at Rs.828 lacs and advances of Rs.1,622 lacs tocapital goods suppliers as at 31.03.2010. These expenseswere incurred on specific projects for expansion,diversification and modernization in all the areas of thecompany’s operations viz. spinning, weaving, finishingand readymade garments.The Company has made investment of Rs.2,280 lacs inspinning for modernization and replacement of spindles,Rs.447 lacs on fabric weaving replacing 20 looms,Rs.951 lacs on fabric processing value adding machinessuitable for technical fabrics and increase in theprocessing capacity by about one million meters a monthbesides Rs.907 lacs on readymade garments to add 4additional lines for trousers and 1 line for production ofJackets at Daman and Surat.The Company has plans to consolidate and achieveoptimum capacity utilization of recently installedadditional production capacities like spinning of wooland wool mix yarns, cotton yarn dyeing, production ofjacquard fabrics, increase in processing capacity, as alsothe increase in production levels of trousers and jackets.The Company has increased exports of value addedfabrics and garments; the share of this segment in thetotal turnover has increased from 44% in 2007-08 to 50%during the year. The Company has started commercialproduction of Technical fabrics.

The Company is increasing consumption of self producedyarn for production of fabric and own fabric for garments.Presently, about 35% of the yarn is being consumed forfabrics. Similarly, about 15% of the fabric production isdelivered to the Company’s own garment units. Thereis good potential to increase it. The ultimate aim is toincrease the share of value added textiles other thanyarn to 65% of total sales.Carreman, a French Customer, which is also JV Partnerof the Company, is providing knowledge and design fornew fabric development. They had so far been providingthese services from their French establishments. Now,the J.V. Company is developing/upgrading a newin-house design studio and sampling dept. in India.The Company has achieved gross turnover of Rs.64,683 lacsand net profit of Rs.3,088 lacs for the year 2009-10. Theperformance is likely to improve in the next year onaccount of capacity increases as well as emphasis onvalue added productions viz. fabrics, garments etc.

c) Segment-wise performanceThe Company is engaged in production of Textileproducts having integrated working and powergeneration. For management purposes, the Company isorganized into major operating activity of the textileproducts and power generation mainly for captiveconsumption Revenue from power generation during ofthe year was less than 10% of the total revenue. TheCompany has no activity outside India except export oftextile products manufactured in India. Thereby, there isno geographical segment and no segment wiseinformation is reported.

d) Internal control systemThe Company has adequate internal audit and controlsystem to ensure that all the transactions are authorized,recorded and reported correctly. Internal control systemconsists of in-house internal audit, an independentChartered Accountant to carry out internal audits,statutory audits and in-buil t internal checkingmechanism. The Company has Audit Committee of theBoard, the composition and functions of which are givenin Corporate Governance Report as part of this AnnualReport.

e) Discussion on financial performance with respectto operating performanceThe operating performance of the Company has beendetailed in the first two paragraphs of the Directors’ reportunder the heads ‘Financial Review’ and ‘Operations.’

f) Developments in human resources and industrialrelationsThe Company’s record of progress is a reflection andoutcome of effective utilization/contribution of its humanresources. The Company has fostered a culture ofownership, accountability and self evaluation thatencourages employees to continuously strive to improveon their efficiency. There exists a system of regularinteraction between the Senior Management andoperators at shop floor level which enables sharing ofbusiness information have review discussions on specific


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operational problems and eliciting suggestions of theemployees. The industrial relations continued to remaincordial throughout the year.The Company has started the H.R. Course for TeamWorking.

g) Major events during the year1. Developed World class fabric testing laboratory as

per ISO, AATCC, ASTM, LS & Co. M&S etc. testingprotocol. The laboratory has successfully achievedaccreditation of levis & Co. Marks & Spencer and isundergoing ISO 17025 NABL accreditation.

2. Developed fabric designing section and created agarment studio at Mumbai for improvement in fabricand garment designs.

3. Started production of technical fabric and jacquardtechnical fabrics.

4. Added one more imported Italian make Stenter

alongwith other balancing/value adding machinesto increase the fabric processing capacity up to4 million meters a month.

5. Allotted 16.50 lacs warrants to persons other thanpromoters at a price of Rs.41/- per warrant. Thesewarrants have since been converted into an equalnumber of Equity shares by the Board of Directors ofthe Company in its meeting held on 27th April, 2010.

6. Taken up installation of 2 nd unit of power plant andproject for technical textiles.

7. Finalised and commenced implementation of furtherexpansion of Spinning, Weaving, Processing andGarmenting capacities.

h) Profit before taxThe profit before tax for the year 2009-10 at Rs.4,334 lacsworks out to 6.70% of sales as against Rs.1,129 lacs, i.e.2.02% of sales in the previous Financial Year- 2008-09.

For BANSWARA SYNTEX LIMITED

Place : Mumbai R.L. TOSHNIWALDate : 26th May, 2010 Chairman & Managing Director


ANNEXURE-III TO DIRECTORS' REPORTINFORMATION PURSUANT TO SECTION 217 (2A) OF COMPANIES ACT, 1956 READ WITH THE COMPANIES (PARTICULARS OFEMPLOYEES) RULES, 1975 AND FORMING PART OF DIRECTORS REPORT FOR THE YEAR ENDED 31ST MARCH, 2010

A. Employed through-out the year and were in receipt of remuneration aggregate of not less than Rs. 24,00,000/- per annum

S.No. Designation& nature o fdut ies

Remuneration(Rs. in Lacs)

Quali f ications &Experience(No. of years)

Date ofCommence-ment ofemployment

1. Shri R.L.Toshniwal Chairman & 103.67 M.Sc.(Tex.) 76 01.08.1977 Oriental CarpetsManaging Leeds University Mfg. (India) Ltd.Director England(47) Chief Executive (6)

2. Shri Ravi Toshniwal Joint Managing 96.21 B.Tech(Chem.Engg.) 46 24.08.1992 -Director (18)

3. Shri Rakesh Mehra Whole-time 95.78 F.C.A (22) 53 01.10.1993 R.R.Toshniwal EnterpriesesDirector Chief Executive (5)

4. Shri Shaleen Toshniwal Whole-time 83.57 MBA (7) 33 21.10.2003 -Director

5. Shri S.S. Sajal President 35.42 B.Tech.PGDIM (40) 61 21.09.1978 Blue Nile Spinning & Wvg.Co. Ltd. SudanDy.wvg. Manager (8)

6. Shri J.K. Rathi President - 27.27 B.E. (Mech.) 59 01.06.1978 R.R. Toshniwal & Co. (P) Ltd.Commercial Manager (3)

B. Employed for a part of the year and were in receipt of remuneration of not less than Rs. 2,00,000/- per month NIL

Age(Years)

Previous employerdesignat ion, per iod ofservice(No. of years)

Notes:-1) Total number of employees included in the above statement are six and the nature of their employment is contractual.2) The above figures are for the twelve months period from 01.04.2009 to 31.03.2010.3) Remuneration comprises salary, allowances, monetary value of perquisites and contribution to provident fund.4) In addition to the above remuneration, employees are also entitled to gratuity.5) Employees at Sr. No.1 to 4 are related to each other.

Name ofthe Employee

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AUDITORS’ REPORTTO THE MEMBERS,BANSWARA SYNTEX LIMITEDWe have audited the attached Balance Sheet of BANSWARASYNTEX LIMITED, as at 31st March, 2010 and also the Profit andLoss Account and Cash Flow Statement of the year ended on thatdate annexed thereto. These financial statements are theresponsibility of the Company’s management. Our responsibilityis to express an opinion on these financial statements based onour audit.We conducted our audit in accordance with auditing standardsgenerally accepted in India. Those standards require that we planand perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of material misstatements.An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in financial statements. An audit alsoincludes assessing the accounting principles used and significantestimates made by the management, as well as evaluating theoverall financial statement presentation. We believe that our auditprovides a reasonable basis for our opinion.As required by the Companies (Auditors' Report) Order, 2003issued by Central Government of India in terms of Sub-Section(4A) of section 227 of the Companies Act, 1956, we enclose in theAnnexure, a statement on the matters specified in paragraph 4and 5 of the said order.1) Further to our comments in the Annexure referred to above,

we report that:

i) We have obtained all the information and explanations,which to the best of our knowledge and belief werenecessary for the purposes of our Audit.

ii) In our opinion, the Company has kept proper books ofaccounts as required by the law, so far as appears fromour examination of those books.

ANNEXURE TO THE AUDITORS' REPORTStatement referred to in paragraph (3) of our report of evendate to the shareholders of the BANSWARA SYNTEX LIMITEDon the accounts for the year ended 31st March, 2010.(i) (a) The company has maintained proper records showing

full particulars including quantitative details andsituation of fixed assets.

(b) Fixed assets of the company have been physicallyverified by the management during the year and thereis also a regular programme of verification which, inour opinion, is reasonable having regard to the size ofthe company and the nature of its assets. No materialdiscrepancies were noticed on such verification.

(c) No substantial part of fixed assets have been disposedoff during the year.

(ii) (a) The Inventory has been physically verified during theyear by the management. In our opinion, the frequencyof verification is reasonable.

(b) The procedures of physical verification of inventoriesfollowed by the management are reasonable andadequate in relation to the size of the company and thenature of its business. Inventories with others areverified by respective party.

(c) The company is maintaining proper records ofinventory. The discrepancies noticed on verification


iii) The Balance Sheet, Profit & Loss Account and Cash FlowStatement dealt with by this report are in agreement withthe books of accounts.

iv) In our opinion, Balance Sheet, Profit & Loss Account andCash Flow Statement dealt with by this report; comply withthe Accounting Standards referred to in sub-section (3c)of section 211 of the Companies Act, 1956.

v) On the basis of written representations received from theDirectors, as on 31st March, 2010 and taken on record bythe Board of Directors, we report that none of the Directoris disqualified as on 31st March, 2010 from being appointedas a Director in terms of Clause (g) of sub section (1) ofSection 274 of the Companies Act, 1956.

vi) In our opinion and to the best of our information andaccording to the explanations given to us, the saidaccounts give the information required by the CompaniesAct, 1956, in the manner so required and give a true andfair view in conformity with the accounting principlesgenerally accepted in India:a) In the case of the Balance Sheet, of the State of Affairs

of the Company as at 31st March, 2010;b) In the case of Profit & Loss Account, of the profit for

the year ended on that date; and

c) In the case of Cash Flow Statement, of the cash flowfor the year ended on that date.

For KALANI & COMPANYChartered Accountants

FRN - 00722C

Place : Mumbai K.L. JHANWARDated : 26 th May,2010 Partner

M.No.14080

between the physical stocks and the book records werenot material.

(iii) (a) The company has not granted any unsecured loan tocompanies, firms or other parties covered in the registermaintained under section 301 of the Companies Act,1956. Accordingly clause 4(iii) (a) to (d) of theCompanies (Auditors' Report) Order, 2003 are notapplicable.

(b) Unsecured loans taken from 10 (Ten) persons coveredin the register maintained under section 301 of theCompanies Act, 1956 amounting to Rs.462.08 lacsoutstanding at the year end and the maximum amountinvolved is Rs.475.20 lacs.

(c) Interest and other terms & conditions of loan taken arenot prima facie prejudicial to the interest to theCompany.

(d) Company is regular in payment of principal amountand interest.

(iv) In our opinion and according to the information andexplanations given to us, there are adequate internalcontrol procedures commensurate with the size of thecompany and the nature of its business with regard topurchases of inventory, fixed assets and with regard to thesale of goods and services. During the course of our audit,

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we have not observed any continuing failure to correctmajor weakness in internal controls system.

( v) (a) According to the information and explanations givento us, we are of the opinion that the transactions thatneed to be entered into the register maintained undersection 301 of the Companies Act, 1956 have beenso entered.

(b) In our opinion and according to the information andexplanations given to us, the transactions made inpursuance of contracts or arrangements entered inthe register maintained under section 301 of theCompanies Act, 1956 and exceeding the value ofrupees five lacs in respect of any party during theyear have been made at prices which are reasonablehaving regard to prevailing market prices at therelevant time.

(vi) In our opinion and according to the information andexplanations given to us, the company has complied withthe provisions of sections 58A and 58AA of the CompaniesAct, 1956 and the Companies (Acceptance of Deposits)Rules,1975 with regard to the deposits accepted from thepublic. To the best of our knowledge and according to theinformation and explanations given to us, no order on thecompany under aforesaid section has been passed bythe Company Law Board.

(vii) In our opinion, the company has an internal audit systemcommensurate with the size and nature of its business.

(viii)According to the information and explanations given tous,the Central Government has prescribed under Section209(1) (d) of the Companies Act, 1956, the maintenanceof cost records in respect of its products manufactured bythe Company. We have broadly reviewed the books ofaccount maintained and in our opinion; the prescribedaccounts and records have prima facie been made andmaintained by the company. We have not, however, madea detailed examination of the records with a view todetermine whether they are accurate or complete.

(ix) (a) The company is generally regular in depositing withappropriate authorities undisputed statutory duesincluding provident fund, investor education &protection fund, employees state insurance, incometax, sales tax, wealth tax, service tax, custom duty,excise duty, cess and other material statutory duesapplicable to it.According to the information and explanations givento us, no undisputed amounts payable in respect ofincome tax, wealth tax, sales tax, custom duty, andcess were in arrears, as at 31st March, 2010 for aperiod of more than six months from the date theybecame payable.

(b) According to the information and explanations givento us, there are no dues of sales tax, income tax,service tax, customs duty, wealth tax and excise dutywhich have not been deposited on account of anydispute except the following.

(x) There are no accumulated losses at the end of financialyear. The Company has also not incurred cash lossesduring the financial year covered by our audit andpreceding financial year.

(xi) In our opinion and according to the information andexplanations given to us, the company has generallynot defaulted in repayment of dues to a financialinstitution and bank.

(xii) According to information & explanations given to us, thecompany has not given any loan and advances on thebasis of security by way of pledge of shares, debenturesand other securities.

(xiii) The Company is not a chit fund. Therefore, the provisionsof clause 4 (xiii) of Companies (Auditors' Report) Order,2003 are not applicable to the Company.

(xiv) In our opinion, the company is not dealing in or tradingin shares, securities, debentures and other investments.Accordingly, the provisions of clause 4 (xiv) of theCompanies (Auditors' Report) Order, 2003 are notapplicable to the Company.

(xv) According to information & explanations given to us, thecompany has given guarantee for Rs.1,950.00 lacs forloans taken by Carreman Fabrics India Limited, a JointVenture. The terms and conditions of such guaranteeare not prejudicial to the interest of the Company.

(xvi) In our opinion, the term loans have been applied for thepurpose for which they were raised.

(xvii) According to the information and explanations given tous and on an overall examination of the Balance Sheetand Cash Flow Statement of the Company, we reportthat the no funds raised on short term basis have beenused for long term investment.

(xviii)According to the information and explanations given tous, the company has not made preferential allotment ofshares to parties and companies covered in the registermaintained under section 301 of the Companies Act,1956.

(xix) The Company has not issued debentures during theyear.

(xx) The Company has not raised any money through publicissue during the year.

(xxi) According to the information and explanations given tous, no fraud on or by the Company has been noticed orreported during the year.

For KALANI & COMPANY Chartered Accountants

FRN – 00722C

K.L. JHANWARPlace : Mumbai PartnerDated : 26th May, 2010 M.No.14080

Central ExciseAct, 1944

2006-07 to2009-10

HonourableHigh Court,Rajasthan

Finance Act, 1994 19,10,010 2006-07

Finance Act, 1994 ServiceTax 4,33,528 2006-07

to 2007-08Commissioner(Appeals),Jaipur-II

Nature of Statute Forum wheredispute ispending

Joint SecretaryGovernment ofIndia

The Rajasthan Taxon Entry of Goodsinto Local Area Act,1999

EntryTax

4,03,61,395

ServiceTax

CESTAT, NewDelhi


Amount(Rs.)

ExciseDuty 11,74,529

Natureof

Dues

2003-04 to2005-06

Period towhich theAmountrelates

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BALANCE SHEETAS AT 31st March, 2010 (Rupees in Lacs)

As at As atSchedule 31st March, 2010 31st March, 2009

SOURCES OF FUNDSShareholders’ FundsShare Capital 1 1,481.14 1,481.14Share Application Money 169.13 -Reserves & Surplus 2 10,130.84 11,781.11 7,622.37 9,103.51Deferred Tax Liability 2,722.61 2,192.93Loan FundsSecured Loans 3 42,424.36 35,405.57Unsecured Loans 4 1,741.91 44,166.27 1,451.52 36,857.09

58,669.99 48,153.53APPLICATION OF FUNDSFixed Assets 5Gross Block 51,067.44 46,886.02Less:Depreciation 17,261.60 14,439.87Net Block 33,805.84 32,446.15Add:Capital work-in-progress 827.69 263.28Add:Advance on Capital Account 1,621.96 36,255.49 380.13 33,089.56

Investments 6 667.30 663.29Current Assets, Loans & AdvancesInventories 7 17,668.17 12,131.20Sundry Debtors 8 6,154.45 5,585.31Cash & Bank Balances 9 506.76 626.30Other Current Assets, and 10 2,575.77 2,223.72Loans & Advances 11 1,775.25 1,721.94

28,680.40 22,288.47Less: Current Liabilities & Provisions Liabilities 12 5,578.12 6,265.21 Provisions 13 1,355.08 1,622.58

6,933.20 7,887.79Net Current Assets 21,747.20 14,400.68

58,669.99 48,153.53Accounting Policies & Notes on Accounts 22

DirectorsSHALEEN TOSHNIWAL, Wholetime DirectorP. KUMARD.P. GARGS.B. AGARWALA.N. JARIWALAVIJAY MEHTA

Schedule 1 to 13 and notes in schedule 22 form part of this Balance Sheet.In terms of our Audit Report of even date:For KALANI & COMPANY R.L. TOSHNIWAL RAKESH MEHRAChartered Accountants Chairman & Managing Director Wholetime DirectorFRN - 00722C

K.L. JHANWARPartnerM.No. 14080

J.K. JAINPlace : Mumbai Sr.Vice President (Finance & Commerce)Dated : 26th May, 2010 & Company Secretary

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PROFIT & LOSS ACCOUNTFOR THE YEAR ENDED ON 31st MARCH, 2010

Current Year Previous YearSchedule 31st March, 2010 31st March, 2009

INCOMETurnover 14 64,682.84 55,895.43Less : Excise Duty 1,586.30 63,096.54 1,001.85 54,893.58Other Income 15 299.39 371.67Accretion / (Decretion) to Stock 16 1,685.76 1028.66

65,081.69 56,293.91EXPENDITUREMaterials 17 30,101.71 26,291.95Manufacturing Expenses 18 13,154.71 11,937.37Payments to and Provisions for Employees 19 6,739.58 5,413.09Administrative & Selling Expenses 20 4,972.19 4,379.55Financial Expenses 21 3,301.67 3,628.89Excise Duty on Finished goods & others 13.18 58,283.04 (179.09) 51,471.76Profit Before Extraordinary Item,Depreciation & Tax 6,798.65 4,822.15Extraordinary Item (608.42) 753.32Profit Before Depreciation & Tax 7,407.07 4,068.83Depreciation 3,073.44 2,939.33Profit Before Tax 4,333.63 1,129.50Taxes on Income Current Tax 736.50 128.18 Deferred Tax 529.68 139.86 Fringe Benefits Tax - 30.33

1,266.18 298.37 Less : MAT Credit Entitlement 20.21 1,245.97 128.00 170.37Net Profit For the Year 3,087.66 959.13Balance Brought Forward 535.60 608.02Amount Available for Appropriations 3,623.26 1,567.15APPROPRIATIONSInterim dividend & Tax thereon (Paid during the year) 229.57 -Proposed Dividend on Preference Shares 5.19 5.19Proposed Dividend on Equity Shares 294.63 235.46Tax on Dividend 49.80 40.90Transfer to General Reserve 2,000.00 2,579.19 750.00 1,031.55Balance Carried to Balance Sheet 1,044.07 535.60Earning Per Share Basic (Rs.) 23.56 7.29Earning Per Share Diluted (Rs.) 20.92 7.29Accounting Policies & Notes on Accounts 22

(Rupees in Lacs)

Schedule 14 to 21 and notes in schedule 22 form part of this Profit & Loss Account.In terms of our Audit Report of even date:For KALANI & COMPANY R.L. TOSHNIWAL RAKESH MEHRAChartered Accountants Chairman & Managing Director Wholetime DirectorFRN - 00722C




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SCHEDULESSchedule 1 to 22 Annexed to and forming integral partof the Accounts for the year ended on 31st March, 2010 (Rupees in Lacs)

As at As at31st March, 2010 31st March, 2009

SCHEDULE ‘1’ SHARE CAPITAL

Authorised2,00,00,000 Equity Shares of Rs.10 each 2,000.00 2,000.00

5,00,000 Redeemable Preference Shares of Rs.100 each 500.00 500.002,500.00 2,500.00

Issued & Subscribed1,31,06,361 Equity Shares of Rs.10 each * 1,310.64 1,310.64

1,73,000 3% Redeemable Preference Shares of Rs.100 each 173.00 173.001,483.64 1,483.64

Paid Up1,31,06,361 Equity Shares of Rs.10 each * 1,310.64 1,310.64Less: Allotment money due

From Directors - -From Others 2.50 1,308.14 2.50 1,308.14

1,73,000 3% Redeemable Preference Shares of Rs.100 each 173.00 173.001,481.14 1,481.14

SCHEDULE ‘2’ RESERVES AND SURPLUS

Capital ReserveAs per last Balance Sheet 202.39 202.39Securities Premium AccountAs per last Balance Sheet 1,750.22 1,750.22Add : Received During the year - 1,750.22 - 1,750.22General ReserveAs per last Balance Sheet 5,134.17 4,384.17Add: Transfer from Profit & Loss A/c 2,000.00 7,134.17 750.00 5,134.17

Profit & Loss Account 1,044.06 535.5910,130.84 7,622.37

* Of above 3,82,222 Equity Shares of Rs.10 each issued in terms of scheme of Amalgamation of erstwhile Banswara TextileMills Limited and 43,44,638 Equity Shares were issued as fully paid up Bouns Shares by way of Capitalisation of SecuritiesPremium Account.

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SecuritiesFor Term Loans from Financial Institutions and Banks:Term Loans from Financial Institutions and Banks are secured by a joint equitable mortgage and/or hypothecation chargesranking pari-passu on immovable/movable properties, present and future of the Company subject to prior charges in favourof the Bankers on specified movable properties created and/or to be created for working capital facilities.

Term Loans from Financial Institutions and Banks are guaranteed by Shri R.L. Toshniwal, Chairman & Managing Directorand Shri Ravi Toshniwal , Joint Managing Director in their personal capacities except for term loans outstanding of Rs.750lacs (Previous year Rs.Nil) from Export Import Bank of India & for term loan outstanding of Rs.741 lacs (Previous year Rs.821lacs) from Export Import Bank of India, which is guaranteed only by Shri R.L.Toshniwal, Chairman & Managing Director.

For Others:Term Loans from others are finance from HDFC Bank Ltd. and ICICI Bank Ltd. secured by way of hypothecation of Vehiclefinanced by them.

For Deferred Payment Credits:Deferred payment credits under Sales Tax Deferment Scheme for Industries 1987 are secured by a joint equitable mortgageand/or hypothecation charges ranking pari-passu on immovable/movable properties procured for expansion project asprescribed under the said scheme Rs.59.10 lacs (Previous year Rs.58.37 Lacs.) are payable within one year.

For Working Capital Loans:Working Capital Loans are secured by way of hypothecation (Floating charges) of Raw material, Dyes-Chemicals, PackingMaterials, Stores & Spares, Stock-in-process, Finished goods, Book debts, Export Incentives and second charge on all theFixed Assets of the Company and also guaranted by Shri R.L. Toshniwal, Chairman & Managing Director and Shri RaviToshniwal, Joint Managing Director in their personal capacities.

As at As at 31st March, 2010 31st March, 2009

SCHEDULE ‘3’ SECURED LOANS

Term LoansFrom Financial Institutions and BanksIndustrial Development Bank of India 830.81 1,164.31Bank of Baroda 2,908.10 2,580.76Punjab National Bank 6,492.68 6,927.82Export Import Bank of India 9,347.28 9,028.86Union Bank of India 2,602.72 829.00Bank of India 1,473.73 1,252.33Axis Bank 2,500.00 2,500.00From Others 3.40 10.18Interest Accrued and Due on Term Loans 107.10 125.46

26,265.82 24,418.72Deferred Payment CreditsDeferred payment credits under RajasthanSales Tax Deferment Scheme 151.59 210.00

Working Capital Loans from BanksPunjab National Bank 9,875.88 6,308.63Union Bank of India 1,823.66 1,558.19Bank of Baroda 2,692.57 1,570.57Bank of India 1,614.84 1,339.46

16,006.95 10,776.8542,424.36 35,405.57


(Rupees in Lacs)

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(Rupees in Lacs)As at As at

31st March, 2010 31st March, 2009

SCHEDULE ‘4’ UNSECURED LOANS

Unsecured Loans:Fixed Deposits : From Directors 27.67 36.63 From Others 715.50 743.17 642.61 679.24

Long Term Loans : From Bank * 532.44 308.00 From Corporates 154.66 687.10 154.00 462.00

Short Term Loans : From Bank - - From Corporates 311.64 311.64 310.28 310.28

1,741.91 1,451.52

Note:* Due within one year Rs.435.12 Lacs (Previous year Rs 168.00 lacs). Loan is backed by post dated cheques.

SCHEDULE ‘5’ FIXED ASSETS

DESCRIPTION OF ASSETS

(Rupees in Lacs)


For theYear

GROSS BLOCK DEPRECIATION NET BLOCK

Lease Hold Land & Site Development 345.36 - 3.98 341.38 3.98 - 341.38 345.36

Free Hold Land & Site Development 47.13 59.50 - 106.63 - - 106.63 47.13

Buildings & Road 6,737.60 1,072.23 - 7,809.83 224.50 1,163.61 6,646.22 5,798.49

Plant & Machinery 37,368.25 3,106.14 375.60 40,098.78 2,657.61 14,768.02 25,330.76 25,018.97

Building Machinery 1.38 - - 1.38 - 1.31 0.07 0.07

Electric & Water Supply Installation 1,092.62 52.62 - 1,145.24 90.71 558.43 586.81 624.91

Furniture & Fixtures 487.68 87.34 0.75 574.27 33.22 325.19 249.08 195.66

Office Equipments 463.79 90.53 1.51 552.81 25.97 303.31 249.50 186.13

Live Stock 0.07 - - 0.07 - - 0.07 0.07

Vehicles 342.14 116.65 21.74 437.05 37.45 141.73 295.32 229.37

SUB-TOTAL 46,886.02 4,585.01 403.58 51,067.44 3,073.44 17,261.60 33,805.84 32,446.15

Previous Year 39,170.18 7,873.55 157.73 46,886.02 2,939.33 14,439.87 32,446.15 27,652.48

Capital Work-In-Progress 827.69 263.28

Advance on Capital Account 1,621.96 380.13

SUB-TOTAL 2,449.65 643.41

TOTAL 36,255.49 33,089.56

Note : Buildings & Road includes Rs.331.32 lacs paid for acquiring 657 equity shares of M/s Rastogi Estate & Construction Co. (Pvt.) Ltd.

attached with right of ownership and possession of office building at Mumbai and Rs.324.01 lacs paid for acquiring a residential flatwith 5 shares of Maker Tower “J” Co-operative Housing Society Ltd. Mumbai attached with right of ownership and possession.

As at

01.04.2009Deductions/Adjustment

As at31.03.2010

Up to31.03.2010

As at31.03.2010

As at31.03.2009

Additions

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SCHEDULE ‘6’ INVESTMENT (AT COST)Long TermI. Trade

A) QuotedIn Equity Shares3,00,000 Equity Shares of Rs. 10/- eachof Banswara Fabrics Ltd. 30.00 30.00(Quotation not available)

B) UnquotedGovernment & other securitiesNational Savings Certificate(Deposited with State and Central Excise Authorities) 0.13 0.13Investment in Joint Venture Company61,99,700 Equity Shares of Rs. 10/- eachof Carreman Fabrics India Ltd. 620.07 620.07Sub Total (I) 650.20 650.20

II. OtherA) Quoted

In Equity Shares10,114 Equity Shares of Rs. 10/- each ofUnion Bank of India 3.04 3.04

B) UnquotedUnit in Mutual Fund1,00,000 Unit @ Rs.10/- Each Principal PNB Long Term EquityFund 3 Year Plan Series-II Growth Plan (NAV Rs.11.02 Per Unit) 10.00 10.00Ask Investment Manager Pvt.Ltd. 4.01 -Real Estate Special Opportunities Portfolio - 1Shares in Co.Operative Bank500 Equity Shares of Rs. 10/- eachof New Indian Co-operative Bank Ltd. 0.05 0.05Sub Total (II) 17.10 13.09Total (I + II) 667.30 663.29

Investments aggregate value ofQuoted Investment

Book Value 33.04 33.04Market Value 292.30 44.85

Unquoted Investment 634.26 630.25

SCHEDULE ‘7’ INVENTORIES*(At lower of Cost or Net Realisable Value)

Raw Material 7,302.59 3,681.48Stores & Spares 1,072.74 842.64Works-in-Process 1,365.74 1,014.45Finished goods

Yarn 2,114.01 2,269.10Cloth Grey 1,870.50 1,696.11Cloth Processed 3,470.78 2,086.43Garment 438.96 7894.25 507.05 6558.69

Waste 32.85 33.9417,668.17 12,131.20

* Includes:(i) In transit Rs.1,290.50 Lacs (Rs.571.35 Lacs)(ii) With others Rs.1,619.37 Lacs (Rs.786.80 Lacs)

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(Rupees in Lacs) As at As at31st March, 2010 31st March, 2009

SCHEDULE ‘8’ SUNDRY DEBTORS (Unsecured)Outstanding Exceeding Six MonthsConsidered Good 309.75 176.59Considered Doubtful 115.18 125.61

424.93 302.20Less: Provision for Doubtful Debts 115.18 125.61

309.75 176.59Other DebtsConsidered Good 5,844.70 5,408.72

6,154.45 5,585.31

SCHEDULE ‘9’ CASH & BANK BALANCESCash on Hand 16.39 13.25Bank BalancesWith Scheduled Banks:-In Fixed Deposits (Including Accrued Interest thereon)* 428.70 498.32-Current Account 61.67 114.73

490.37 613.05* Fixed Deposits with interest pledged with Bankers and 506.76 626.30 Government authorities Rs.378.61 Lacs (Rs.498.32 Lacs)

SCHEDULE ‘10’ OTHER CURRENT ASSETSA) RECEIVABLES AGAINST EXPORT

Duty Entitlement Pass Book 1,007.73 629.93Others 669.99 518.56

1,677.72 1,148.49B) OTHER CLAIMS RECEIVABLE

Under TUF Scheme 843.09 1,014.54Others 54.96 60.69

898.05 1,075.232,575.77 2,223.72

SCHEDULE ‘11’ LOANS AND ADVANCES (Unsecured-Considered Good)Advance recoverable in cash or in kind or for value to be received 1,145.92 1,035.82Loans to Employees & Workers 39.38 54.56Security Deposits with Govt.Deptt. & Others 205.69 266.48Prepaid Expenses 170.82 141.92MAT Credit Entitlement 213.44 193.23Advance Income Tax and Tax deducted at source 609.44 189.31Less : Provision for Taxation (as per contra) 609.44 - 159.38 29.93

1,775.25 1,721.94


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SCHEDULE ‘12’ CURRENT LIABILITIESAcceptance (Guaranteed by Banks) 282.87 301.06Sundry Creditors - Micro and Small Enterprises @ 10.90 9.38 - Others 4,597.70 5,279.12{including book overdrawn Rs.38.75 Lacs (93.27 Lacs)}Unclaimed Dividend 27.45 19.80Security Deposits 24.88 30.52Interest accrued but not due 31.20 33.66Other Liabilities 603.12 591.67

5,578.12 6,265.21

SCHEDULE ‘13’ PROVISIONSProposed Dividend 299.82 240.65Tax on Dividend 49.80 40.90Gratuity 589.66 493.03Leave Encashment 112.27 94.68Foreign Exchange Financial Instruments 144.90 753.32Taxation 768.07 159.38Less: Advance Tax and Tax deducted 609.44 158.63 159.38 -at source (as per contra) 1,355.08 1,622.58

@ To the extent information received for status under the Micro, Small and Medium Enterprises Development Act, 2006.

Current Year Previous Year31st March, 2010 31st March, 2009

SCHEDULE ‘14’ TURNOVERYarn 30,508.50 26,466.60Cloth 25,852.95 23,835.97Garment 5,850.25 4,364.81Power 1,153.77 472.99Waste 227.08 174.79Fibre 44,886 Kgs.(2,00,782 Kgs.) 53.04 163.19Scrap 165.93 137.55Trading Goods - 0.16Job Income 871.32 279.37

64,682.84 55,895.43

SCHEDULE ‘15’ OTHER INCOMEInterest Received 258.75 305.51 (Tax Deducted at sources Rs.35.28 Lacs Previous year Rs 55.60 Lacs)Rent received 3.44 3.81Profit on sale of fixed assets 1.89 0.64Exchange Rate Fluctuation 10.78 -Bad Debts Recovered - 2.38Dividend Received 0.56 0.40Others 23.97 58.93

299.39 371.67


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(Rupees in Lacs) Current Year Previous Year31st March, 2010 31st March, 2009


SCHEDULE ‘17’ MATERIALSRaw Material ConsumedOpening stock 3,681.48 3,344.58Add : Purchases (Excluding for Sale/Claim) 30,571.06 24,229.08

34,252.54 27,573.66Less : Closing stock 7,302.59 3,681.48

26,949.95 23,892.18

Dyes & Chemicals Consumed 1,988.56 1,555.09Purchase : Cloth 225.07 235.35 Yarn 885.93 458.74 Fibre 44,886 Kgs.(2,00,782 Kgs.) 52.20 150.59

1,163.20 844.6830,101.71 26,291.95

SCHEDULE ‘18’ MANUFACTURING EXPENSESStores & Spare Parts Consumed 2,022.07 1,708.30Packing Material Consumed 878.40 780.84Power 1,145.12 519.03Fuels 6,095.16 6,246.10Job Charges 2,007.83 2,167.74Repairs to : Plant & Machinery 731.69 383.92

Building 229.26 102.74Others 45.18 28.70

13,154.71 11,937.37

SCHEDULE ‘19’ PAYMENTS TO AND PROVISIONS FOR EMPLOYEESSalaries, Wages, Allowance, Bonus etc. 5,790.49 4,681.04Contribution to Provident & Other Funds 622.34 506.17Workmen & Staff Welfare Expenses 326.75 225.88

6,739.58 5,413.09

SCHEDULE ‘16’ ACCRETION / (DECRETION) TO STOCK

Closing Stock Yarn 2,114.01 2,269.10Cloth (Grey) 1,870.50 1,696.11Cloth (Processed) 3,470.78 2,086.43Work-in-Process 1,365.75 1,014.45Waste 32.85 33.94Garment 438.95 507.05

9,292.84 7,607.08

Less : Opening Stock Yarn 2,269.10 2,409.61Cloth (Grey) 1,696.11 807.22Cloth (Processed) 2,086.43 2,058.04Work-in-Process 1,014.45 1,070.96Waste 33.94 17.10Garment 507.05 215.49

7,607.08 6,578.421,685.76 1,028.66

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(Rupees in Lacs)Current Year Previous Year


SCHEDULE ‘20’ ADMINISTRATIVE, SELLING & OTHER EXPENSES

Administrative ExpensesRent 60.70 58.95Rates and Taxes 107.84 80.75Managing Director's Remuneration 97.97 43.32Directors' Remuneration 259.62 100.55Insurance Charges 39.60 55.66Payment to AuditorsAs Auditors - Fees 4.35 4.05

- Expenses 1.04 1.35In other capacity

- Tax Audit Fees 0.74 0.67- Certification 3.82 1.65- Taxation Matters 1.95 1.96- Service tax 0.92 0.45

Directors' Fees 6.93 5.50Travelling Expenses 69.05 51.93Directors' Travelling Expenses 11.25 10.21Foreign Travelling Expenses 123.78 94.21Communication Expenses 108.44 94.07Legal & Professional Expenses 109.83 60.89Charity & Donation 27.33 7.80Loss on forward exchange contracts 57.97 138.31Loss on Sale of Fixed Assets 10.86 2.42Exchange Rate Fluctuation - 62.28Miscellaneous Expenses 424.79 398.73

1,528.78 1,275.71Selling ExpensesCommission to Selling Agents 1,379.56 1,238.27Brokerage and Discounts 200.53 160.81Freight, Octroi and Forwarding Charges 1,534.97 1,467.37Claims 157.91 128.95Advertisements 19.19 8.85Provision for Doubtful Debts 63.74 45.33Others 87.51 54.26

3,443.41 3,103.844,972.19 4,379.55

SCHEDULE ‘21’ FINANCIAL EXPENSESInterest onTerm Loans 1,491.71 1,561.97Bank & Others 1,502.99 1,667.92

2,994.70 3,229.89Bank & Other Charges 306.97 399.00

3,301.67 3,628.89


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SCHEDULE ‘22’ ACCOUNTING POLICIES AND NOTES ON ACCOUNTS

A) ACCOUNTING POLICIES1. System of Accounting and Use of Estimates

The Company follows the mercantile system of accounting by following accrual concept in the preparation of accounts.The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount ofassets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during thereporting period. Difference between the actual results and estimates are recognized in the period in which the results areknown/ materialized.

2. Fixed AssetsValue of Gross Block of fixed assets represent cost of acquisition, including non-refundable taxes & duties, expenditure oninstallations, attributable pre-operative expenses including borrowing cost and other identifiable direct expenses incurredupto the date of commencement of commercial use of the assets.

However value of gross block of fixed assets acquired upto 31.03.1985 has been stated at revalued amount as on31.03.1986.

3. DepreciationDepreciation on fixed assets is provided for on straight line method in accordance with the provisions of section 205(2)(b)of the Companies Act, 1956. Depreciation on additions/disposals during the year is provided on pro-rata basis.

Consequent to changes made in schedule XIV, vide Notification No. GSR 756E dated 16.12.93, the company had revisedthe rate of depreciation. The specified period had been recomputed as suggested by the Circular dated 20.12.93 exceptin case of petty assets like furniture, fixture and office equipment where it is difficult to effect the changes. While adoptingthe revised rates, the Spinning Plant has been categorized as “Continuous Process Plant” on the basis of technicalopinion obtained by the company.

Value of leasehold land is amortized over the period of its lease.

4. Valuation of InventoriesInventories are valued at Lower of Cost or Net Realisable Value. Cost is measured on First In First Out basis.

5. Turnoveri) Turnover are inclusive of excise duty, refund and other related realization but exclusive of value added tax charged.ii) Job income included in turnover, is accounted for on delivery of finished goods inclusive of excise duty.

6. InvestmentsLong Term Investments are carried at cost. Whereas, Current Investments are carried at lower of Cost or Net RealisableValue. In case of Long Term Investments, other than temporary diminution in the value of investment is provided for.

7. Benefits Receivable Against Export and Its ObligationUnutilized credits, entitlements under Duty Entitlements Pass Book (DEPB) schemes are accounted for in the year ofexport at market value.

8. Foreign Currency Transactionsi) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing on the day of

the transactions.

ii) Monitory items denominated in foreign currency at the year end and not covered by forward exchange contracts aretranslated at year end rates and those covered by forward contracts are translated at the rate ruling at the date oftransactions as increased or decreased by the proportionate difference between the forward rate and exchange rateon the date of transactions such difference having been recognized over the life of the contract. Foreign exchangefinancial instruments in hand at the year end are valued at mark to market.

Any income or expenses on account of exchange difference either on settlement or on translation is recognized in theprofit and loss account.

9. Employees’ Benefits

i) Short-term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss accountfor the year in which the related service is rendered.

ii) Retirement and other long term employee benefits are recognized as an expense in the profit and loss account for theyear in which the employee has rendered services. The expense is recognized at the present value of the amountpayable determined using actuarial valuation techniques. Actuarial gains and losses in respect of retirement andother long term benefits are charged to the profit and loss account.

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SCHEDULE ‘22’ ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)10. Provision For Doubtful Debts

15% is being provided each year on amount outstanding over a period of 6 months.

11. Taxes on Income

Current tax is determined as the amount of tax payable to the Taxation Authorities in respect of taxable income for the year.

Deferred tax is recognized, subject to consideration of prudence, in respect of deferred tax assets, on timing differencesbeing difference between taxable income and accounting income that originate in one year and are capable of reversalin one or more subsequent years.

In respect of unabsorbed depreciation / carry forward of losses under the tax laws, deferred tax assets are recognized onlyto the extent that there is virtual certainty that future taxable income will be available against which such deferred taxassets can be realized.

12. Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the costof such assets. A qualifying asset is one that takes necessarily substantial period of time to get ready for its intended use.All other borrowing costs are charged to revenue.

13. Except where stated, accounting policies are consistent with the generally accepted accounting principles and have beenconsistently applied.

B) NOTES ON ACCOUNTS

1. Contingent liabilities not provided for in respect of: - (Rupees in Lacs)As at As at

31.03.2010 31.03.2009

a) Bills discounted with banks remaining outstandingi) Against foreign LC 4,615.09 5,158.54

ii) Others 1,210.28 844.05

b. Letter of Credit established with banks

i) Revenue account 812.51 26.18

ii) Capital account 2,723.70 -

c. Guarantees given by the bankers on behalf of the company for 306.14 173.60

which FDRs Rs.31.39 lacs (Rs.19.39 lacs) pledged with them.

d. Guarantees given by Company to Banks for loan to Carreman Fabrics India Ltd. 1,950.00 1,950.00[Outstanding as on 31.03.2010 Rs.1,592.28 Lacs (previous year Rs.1,757.59 Lacs)]

e. Claims against the company not acknowledged as debt: -

(a) Under Tax Laws 577.74 455.85

(b) By Others:

(i) On Revenue account 4.99 4.24 (ii) On Capital account Nil Nil

There is no reimbursement possible on account of contingent liabilities.

2. Estimated amount of contracts remaining to be executed on Capital account Rs.6,443.46 lacs (Rs.2,486.84 lacs) andexport obligation against EPCG licenses Rs.14,378.00 lacs (previous year Rs.13,141.95 lacs). The Company has alsocommitted to contribute Rs.25.00 lacs to Real Estate Opportunity Portfolio-1 out of which Rs.5.00 lacs is paid.

3. Advances includes amount due from officers of the Company Rs. Nil (Nil) with maximum debit balance Rs.2.44 lacs(Rs.1.13 Lacs). Debtors include Rs. Nil (Nil) due from directors with maximum balance of Rs. Nil (Rs. Nil). It also includesRs. Nil (Nil) due from a partnership firm with maximum balance of Rs. 28.45 lacs (Rs.57.32 Lacs) in which directors arepartners.

4. Excise Duty shown under expenditure represents the aggregate of excise duty borne by the Company and differencebetween excise duty on opening and closing stock of finished goods.

5. Credit in respect of Minimum Alternative Tax under Income Tax Act 1961 (MAT Credit–Entitlement) is recognized inaccordance with guidance note issued by the Council of the Institute of Chartered Accountants of India.


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SCHEDULE ‘22’ ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)

6. Disclosures as required by Accounting Standards:

A. Accounting Standard: 15 “Employee Benefits”, the disclosures of Employee benefits as defined in theaccounting standard are given below:

1. Defined Contribution PlanEmployer’s contribution to provident fund paid Rs.453.03 Lacs (Previous year Rs.366.72 Lacs) has been recognizedas expense for the year.

2. Defined Benefit Plan

Present value of gratuity and long earned leave obligation is determined based on actuarial valuation using theprojected unit credit method which recognises each period of service as giving rise to additional unit of employeebenefit entitlement and measures each units separately to built up the final obligation. Short term earned leaveencashed during the year charged to Profit & Loss Account.

(Rupees in Lacs) Gratuity As At Leave Encashment As At

31.03 2010 31.03.2009 31.03.2010 31.03.2009I. Assumptions

Mortality LIC (1994-96) Ult LIC (1994-96) UltDiscount Rate 8.00% 8.00% 8.00% 8.00%Rate of increase in compensation 4.00% 4.00% 4.00% 4.00%Rate of return (expected) on plan 0.80% 0.80% 0.80% 0.80%Assets withdrawal ratesExpected average remaining service (Years) 32.34 32.73 36.19 30.69

II. Charges in Present Value of Obligations (PVO)PVO at beginning of period 493.03 375.15 94.68 69.56Interest Cost 37.18 30.37 5.98 5.29Current Service Cost 102.43 75.62 33.13 35.54Benefits paid (56.53) (35.65) (39.92) (14.56)Actuarial (gain)/loss on obligation 13.55 47.54 18.41 (1.15)PVO at end of period 589.66 493.03 112.27 94.68

III. Amounts to be recognized in the Balance Sheetand Statement of Profit & Loss accountPVO at end of period 589.66 493.03 112.27 94.68Fair Value of Plan Assets at end of period - - - -Funded Status (589.66) (493.03) (112.27) (94.68)Unrecognized Actuarial Gain/(Loss) - - - -Net Asset/(Liability) recognized in the balance sheet (589.66) (493.03) (112.27) (94.68)

IV. Expense recognized in the statement of P & L A/cCurrent Service Cost 102.43 75.62 33.13 35.54Interest Cost 37.18 30.37 5.98 5.29Expected Return on Plan Assets - - - -Net Actuarial (Gain)/Loss recognized for the period 13.55 47.54 18.41 (1.15)Expense recognized in the statement of P & L A/c 153.16 153.53 57.51 39.68

V. Movements in the liability recognized in Balance SheetOpening Net Liability 493.03 375.15 94.68 69.56Expenses as above 153.16 153.53 57.51 39.68Benefits paid (56.53) (35.65) (39.92) (14.56)Closing Net Liability 589.66 493.03 112.27 94.68

B. Accounting Standard 17 - “Segment Reporting”The Company is engaged in production of Textile products having integrated working and power generation. Formanagement purposes, Company is organized into major operating activity of the textile products besides powergeneration. Revenue from power generation of the year is less than 10% of the total revenue. The company has noactivity outside India except export of textile products manufactured in India. Thereby no geographical segment and nosegment wise information is reported.

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Nature of TransactionRelated Parties

Referred in 1(a) above Referred in 1(b) above Referred in 1(c) above2009-2010 2008-2009 2009-2010 2008-2009 2009-2010 2008-2009

SALESCloth 6.40 0.61 2.84 21.43 - -Yarn 5.22 - 25.61 45.30 - -PURCHASECloth 271.86 186.01 - - - -Yarn 0.05 - - - - -JOB CHARGESWeaving 1,007.00 1,119.15 - - - -EXPENSESRent - - - - 9.60 9.60Remuneration - - 379.24 165.19 - -Interest 10.79 5.98 3.23 1.90 15.72 14.00Reimbursement of Expenses (Net) 4.60 0.19 - - - -INCOMESRent 0.18 0.18 - - - -Supervision Charges - 1.80 - - - -Job Charges 69.20 - - - - -FINANCEFixed Deposit Accepted - - - 15.00 25.00 5.00Fixed Deposit Repayment - - - - 17.50 -OUTSTANDINGFixed Deposits - - 27.67 27.66 137.28 129.51Amount Receivable 68.64 - - 0.25 - -Amount Payable 373.75 508.57 - - - -Property Deposit - - - - 80.00 80.00Capital Contribution 650.07 650.07 - - - -



C. Accounting Standard 18 - “Related Party Disclosure”The Company has identified all the related parties as per details given below:

1. Relationship :a) Joint Venture and Associate concerns :

Carreman Fabrics India Ltd.Banswara Fabrics Ltd.

b) Key Management Personnel and Their Enterprises:Shri R.L.ToshniwalShri Ravi ToshniwalShri Rakesh MehraShri Shaleen ToshniwalDhruv ImpexMehra International

c) Relatives of Key Management Personnel and their Enterprises where transactions have taken place. :Shri Rameshwar Lal Ravindra Kr Toshniwal HUFShri Ravindra Kumar Toshniwal HUFSmt. Prem ToshniwalSmt. Navneeta MehraSmt. Radhika ToshniwalSmt. Sonal ToshniwalToshniwal TrustMs. Esha ToshniwalShri Dhruv Toshniwal

Note: Related party relationship is as identified by the Company and relied upon by the Auditors.2. Transactions carried out with related parties referred in 1 above, In ordinary course of business:

(Rupees in Lacs)

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SCHEDULE ‘22’ ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.)In respect of the outstanding balance recoverable as at 31st

March, 2010, no provision for doubtful debts is required to be

made. During the year, there were no amounts written off or written back from such parties.D. Accounting Standard 20 - “Earning Per Share”

Required disclosures are given below :Unit 2009-2010 2008-2009

a) Amount used as the numerator profit after tax, Rs. In lacs 3,081.61 953.04dividend on preference shares and tax thereon.

b) Weighted average number of equity shares Nos. 1,30,81,356 1,30,75,208used as the denominator in computing basicEarning Per Share.

Add : Potential no. of equity shares that could Nos. 16,50,000 -arise on conversion of warrants into equity shares.

Weighted average number of shares used in Nos. 1,47,31,356 1,30,75,208computing Diluted Earning per Share

c) Nominal value per Share. Rs. 10.00 10.00d) Earnings Per Share:

- Basic Rs. 23.56 7.29- Diluted Rs. 20.92 7.29

The Company has allotted 16,50,000 warrants at the meeting of Board of Directors held on 29th August, 2009 topersons other than Promoters at a price of Rs.41/- per share, including premium of Rs.31/- per share calculatedas per SEBI (DIP) Guidelines. The Company has received Share Application Money @ Rs.10.25 per warrantbeing 25% of the price. Accordingly the diluted earning per share has been calculated.

E. Accounting Standard – 22 “Taxes on Income”Considering accounting procedure prescribed by the Standard, the following amounts have been worked out andprovided in books:

Major components of deferred tax balances

(Rupees In Lacs)

PARTICULARS 31 st March, 2010 31st March, 2009

Deferred Tax Liabilities

i) Difference between accounting and tax depreciation (cumulative) 3,235.98 3,144.54TOTAL 3,235.98 3,144.54

Deferred Tax Assetsi) Accumulated unabsorbed depreciation - 258.89ii) Provision for doubtful debts (to date) 39.15 42.69iii) Disallowances under section 43B for non payment of expenses 185.26 193.62iv) Others 288.96 456.41

TOTAL (i to iv) 513.37 951.61Net Deferred Tax Liabilities 2,722.61 2,192.93

Net current deferred tax liability of Rs.529.68 Lacs has been charged to Profit & Loss Account besides current taxRs.736.50 lacs as per Income Tax Act, 1961.

F. Accounting Standard 27 – “Financial Report of interest in Joint Venture”a) The Company has entered into the Joint Venture with Carreman, France for 50% ownership interest in jointly

controlled entity Carreman Fabrics India Ltd.b) The above Joint Venture Company is incorporated in India. The company’s share of assets and liabilities as on

31 st March, 2010 and income and expenses for the period ended on that date in respect of joint venture entities asper Financial Statements is given below:

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SCHEDULE ‘22’ ACCOUNTING POLICIES AND NOTES ON ACCOUNTS (Contd.) (Rupees In Lacs)

31 st March, 2010 31st March, 2009

i. AssetsLong Term Assets 1,292.61 1,447.98Current Assets 344.60 361.69Total (i) 1,637.21 1,809.67

ii. LiabilitiesLong Term Liabilities 881.97 1,022.17Current Liabilities 22.80 58.90Total (ii) 904.77 1,081.07

iii. Contingent Liability Nil Nil

iv. Capital Commitments Nil Nil

v. Incomes 513.88 576.56

vi. Expenditures 490.44 528.95The Company has given guarantee in favour of bankers of Carreman Fabrics India Ltd. for an amount of Rs.1,950 lacs(Rs.1,950 Lacs) for term loan. [Outstanding as on 31.03.2010 Rs.1,592.28 Lacs (previous year Rs.1,757.59 Lacs)]

G. Accounting Standard: -28 “Impairment of Assets”:The Company assessed potential generation of economic benefits from its business units and is of the view that assetsemployed in continuing businesses are capable of generating adequate returns over their useful lives in the usualcourse of business, there is no indication to the contrary and accordingly the management is of the view that noimpairment provision is called for in these accounts.

H. Accounting Standard: - 29 “Provisions, Contingent Liabilities and Contingent Assets”: Movement in Provisions :

Sr. No. Nature of Provisions Provision Provision Provision Provision Provisionoutstanding at made during utilized reversed outstandingthe beginning the year during the during the at the end

of the year year year of the year

1. Taxation 159.38 736.50 127.81 - 768.072. Proposed Dividend 240.65 299.82 240.65 - 299.823. Tax on Proposed Dividend 40.90 49.80 40.90 - 49.804. Gratuity 493.03 153.16 56.53 - 589.665. Leave Encashment 94.68 57.51 39.92 - 112.276. Foreign Exchange 753.32 753.32 - 608.42 144.90

Financial Instruments

8. Financial and Derivative InstrumentsCompany has entered into following foreign exchange financial instrumentsa) The company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations

relating to certain firm commitments on forecasted transactions as approved by Board of Directors. The company doesnot use forward contracts for speculation purpose.Outstanding forward exchange financial instruments entered into by the company for hedging of export realization :

(Amount in Lacs)As at No. of Contracts US Dollar Equivalent INR Equivalent

31.03.2010 31 250.46 11,245.5431.03.2009 8 37.53 1904.16

Outstanding foreign exchange option transactions or currency swap:(Amount in Lacs)

As at No. of Contracts US Dollar Equivalent INR Equivalent

31.03.2010 2 26.25 1,178.6331.03.2009 3 175.00 8,877.75

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b) Foreign Currency exposure that are not hedged by financial instruments or forward contracts as at 31st March, 2010amount to US Dollar 95.24 lacs (equivalent to Rs.4,276.49 Lacs) (Previous year US Dollar 38.47 lacs equivalent toRs.1,951.80 Lacs)

c) Extraordinary items represent write back of provision made in previous year on maturity of foreign exchange financialinstruments which were recognized on mark to market basis.

9. Details of Dues to Micro Enterprises and Small Enterprises


10.90 9.38

Nil Nil

Nil Nil

Nil Nil

Nil Nil

10. Managerial Remuneration and Perquisites of: -

Managing Director Other Whole-time Directors

2009-2010 2008-2009 2009-2010 2008-2009Salary 45.00 39.00 104.03 90.47Provident Fund 5.04 4.32 11.80 10.08Benefits and Perquisites 5.70 5.28 15.95 16.04Commission 47.93 - 143.79 -

103.67 48.60 275.57 116.59

Computation of net profit in accordance with Section 198 read with section 309(5) and section 349 of the Companies Act,1956.

a) The principal amount and the interest due thereon (to be shownseparately) remaining unpaid to any supplier as at the end of theaccounting year (No amount is due for more than 45 days).

b) The amount of interest paid by the buyer in terms of Section 16 ofthe Micro Small and Medium Enterprise Development Act, 2006,along with the amounts of the payment made to the supplierbeyond appointed day during the accounting year.

c) The amount of interest due and payable for the period of delay inmaking payment (which have been paid but beyond theappointed day during the year) but without adding the interestspecified under Micro Small and Medium EnterpriseDevelopment Act, 2006.

d) The amount of interest accrued and remaining unpaid at the endof the accounting year.

e) The amount of further interest remaining due and payable evenin the succeeding years. Until such date when the interest duesas above are actually paid to the small enterprise for the purposeof Disallowance as a deductible expenditure under Section 23of the Micro Small and Medium Enterprise Development Act,2006.

(Rupees In Lacs)

(Rupees In Lacs)

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(Rupees In Lacs)

2009-10 2008-09Profit before taxation 4,333.63 1,129.49Add: Depreciation (As per Books) 3,073.44 2,939.33

Directors' Remuneration 379.24 165.19Directors’ fees 6.93 5.50Provision for doubtful debts (Net) 63.74 45.33Loss on sales of fixed assets as per Books 10.86 2.42

7,867.84 4,287.26Less: Depreciation as per Section 349 3,073.44 2,939.33

Profit on sale of fixed assets as per Books 1.89 0.64Loss on sales of fixed assets under section 349 (Net) - -

3,075.33 2,939.97Net profit under section 198 of the Companies Act, 1956 4,792.51 1,347.29Commission payable @ 1% of above profit to CMD, Jt. MD & 2 Whole-time 47.93 -Directors each.

11. Information in respect of: -

a) Licensed capacity N.A. N.A

b) Installed CapacityYarn Spinning (Ring Spindles) 1,33,588 1,33,588Yarn Spinning (Air Jet Spindles) 576 576Fabric Weaving (Looms) 202 206Fabric Processing (Stenters) 5 4Garment (Pcs.) Not Assessed Not Assessed

c) Quantitative details in respect of manufactured & other goods: -

Goods Opening Production Purchase/ Sales/ ClosingManufactured Stock Transfer Utilised Stock

Yarn (Kgs.) 17,10,781 2,61,75,028* 6,58,261 2,72,33,291 13,10,779(18,34,085) (2,36,72,811) (3,81,576) (2,41,77,691) (17,10,781)

Cloth (Mtrs.) 69,95,781 2,85,84,098** 5,40,582 2,79,71,555 81,48,906(45,78,865) (2,69,47,530) (8,51,477) (2,53,82,091) (69,95,781)

Garments / Madeups 1,62,956 15,30,781*** 4,400 14,57,537 2,40,600(No. of Pcs.) (93,684) (11,35,348) (Nil) (10,66,076) (1,62,956)Waste (Kgs.) 1,49,920 12,79,750 Nil 12,67,261 1,62,409

(1,26,937) (11,76,368) (Nil) (11,53,385) (1,49,920)Power (Units) Nil 14,19,96,392 2,35,91,884 16,55,88,276 Nil

(Nil) (13,03,97,201) (1,05,04,847) (14,09,02,048) (Nil)

* Excluding job spg. for others N i l Kgs. (Nil Kgs.)* Including job done by others Nil Kgs. (Nil Kgs.)** Including job woven by others 1,36,40,224 Mtrs. (1,26,03,060 Mtrs.)** Excluding job weaving for others 3,45,912 Mtrs. (3,969 Mtrs.)** Excluding job processing for others 54,80,865 Mtrs. (19,71,812 Mtrs.)*** Including job done by others 30,560 Pcs. (12,580 Pcs.)*** Excluding job done for others 61,632 Pcs. (30,551 Pcs.)


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12. (A) Quantitative details in respect of Raw Material: -

Opening Purchase/ Consumption* Sales / ClosingStock Transfer Adjustments Stock

Fibre 22,44,419 2,84,41,778 2,70,08,366 44,886 36,32,945(Kgs.) (21,24,499) (2,47,48,096) (2,44,27,394) (2,00,782) (22,44,419)

Yarn 6,47,211 87,31,921 83,61,437 Nil 10,17,695(Kgs.) (5,08,414) (76,77,664) (75,38,867) (Nil) (6,47,211)

Cloth 1,85,739 21,96,214 21,77,334 Nil 2,04,619(Mtrs.) (91,268) (18,08,898) (17,14,427) (Nil) (1,85,739)

* Includes material consumed out of internal transfers.

(B) (a) Value of Imports on CIF basis: - (Rupees in lacs)

2009-10 2008-09(i) Raw Material 1,644.34 1,792.83(ii) Dyes & Chemicals 160.08 167.52(iii) Components & Spare Parts 442.86 399.62(iv) Capital goods 1,732.15 1,563.66

(b) Value of Raw Material, Components & Spare parts consumed.Rupees in lacs Percentage (%)

2009-10 2008-09 2009-10 2008-09

(I) Raw Material(i) Imported 987.73 (1,691.29) 3.67 (7.08)(ii) Indigenous 25,962.22 (22,200.89) 96.33 (92.92)

26,949.95 (23,892.18) 100.00 (100.00)

(II) Components & Spare Parts(i) Imported 728.98 (456.81) 36.05 (26.74)(ii) Indigenous 1,293.09 (1,251.49) 63.95 (73.26)

2,022.07 (1,708.30) 100.00 (100.00)(c) Dyes & Chemicals: -

(i) Imported 388.67 (147.69) 19.60 (9.50)

(ii) Indigenous 1,599.89 (1,407.40) 80.40 (90.50)1,988.56 (1,555.09) 100.00 (100.00)

(d) Expenses in foreign currency (in respect of): - In Rupees(i) Dividend 9.16 Lacs (6.84 Lacs)(ii) Professional & Consultancy Charges Nil Lacs (2.69 Lacs)(iii) Others 1,746.29 Lacs (1,411.15 Lacs)

(e) Earning in Foreign Currency (in respect of): - In Rupees(i) Exports of goods on FOB basis 34,346.89 Lacs (30,980.71 Lacs)(ii) Other Realization 1,823.05 Lacs (398.45 Lacs)

13. Previous year’s figures have been reworked, rearranged, regrouped and reclassified, wherever considerednecessary and to make them comparable.

Note: Figures in brackets are pertaining to the previous year.

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BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILEI Registration Details

Registration Number L24302 RJ 1976 PLC 00 1684 State Code 17 Balance Sheet Date 31.03.2010

II Capital raised during the year (Amount in Rupees Thousands)Public Issue Right Issue Bonus Issue Private Placement

NIL NIL NIL NIL

III Position of mobilization and deployment of funds (amount in Rupees Thousands)

Total Liabilities 58,75,589 Total Assets 58,75,589

Sources of Funds:Paid-up Capital 1,48,114 Share Application Money 16,913

Reserve & Surplus 10,13,084 Deferred Tax Liability 2,72,261

Secured Loans 42,42,436 Unsecured Loans 1,74,191

Application of Funds :Net Fixed Assets 36,25,549 Investments 66,730

Net Current Assets 21,74,720 Misc. Expenditure -

Accumulated Losses -

IV Performance of the Company (Amount in Rupees Thousands)

Turnover 64,68,284 Total Expenditure 60,34,921

Profit before Tax 4,33,363 Profit after Tax 3,08,766

Dividend per Share in Rs. 3.50 Earning per Share in Rs. :- Interim Rs. 1.50 - Basic 23.56

- Final Rs. 2.00 - Diluted 20.92

V. Generic Names of Three Principal Products/Services of Company.Item code No. (ITC code) 5509

Product Description YARN SYNTHETIC STAPLE

Item code No. (ITC code) 5513Product Description WOVEN FABRIC

Item code No. (ITC code) 6203

Product Description GARMENT



In terms of our Audit Report of even date:For KALANI & COMPANY R.L. TOSHNIWAL RAKESH MEHRAChartered Accountants Chairman & Managing Director Wholetime DirectorFRN - 00722C



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Cash Flow Statement For The Year Ended 31st March, 2010, pursuant to the Listing Agreementwith Stock Exchanges, Mumbai.

.2009-2010 2008-2009

A) Cash Flow From Operating ActivitiesNet Profit After tax as per P & L Account 3,087.66 959.12Adjustment forProvision for Taxation and Deferred Tax liabilities 1,245.97 170.37Net profit before tax and after extra ordinary items 4,333.63 1,129.49Adjusted forDepreciation 3,073.44 2,939.33Profit/ Loss on Sale of fixed assets (net) 8.97 1.78Interest paid 3,301.67 3,628.89Rent received (3.44) (3.81)Dividend received (0.56) (0.40)Extraordinary Items (608.42) 5,771.66 753.32 7,319.11Operating profit before working capital changes 10,105.29 8,448.60

Adjusted forIncrease in trade & other receivable (984.22) (1,514.66)Increase in inventories (5,536.97) (1430.73)Increase/(-)Decrease in trade payable (572.87) (7,094.06) 129.53 (2,815.86)Cash generated from operations 3,011.23 5,632.74Net Tax Inflow / (-)Outflow (547.94) 22.62Net cash from operating activities (A) 2,463.29 5,655.36

B) Cash Flow From Investing ActivitiesIncrease(-)/Decrease (+) in capital work-in-progress (1,806.24) 3,619.26Purchase of fixed assets (4,525.61) (7,868.77)Purchase of investment (4.01) -Sale of Fixed assets 83.49 5.85Rent received 3.44 3.81Dividend received 0.56 0.40Net cash used in investing activities (B) (6,248.37) (4,239.45)

C) Cash Flow From Financing ActivitiesProceeds from issue of Share Capital (Application Money) 169.13 -Proceeds from long term borrowings 3,541.45 1,827.37Repayment of long term borrowings (1,752.76) (1,302.00)Interest paid (3,301.67) (3,628.89)Increase /(Decrease) in bank borrowings 5,230.10 1,672.71Proceeds from unsecured loan 290.41 138.53Dividend and tax thereon Paid (511.12) (189.73)Net cash from financing activit ies (C) 3,665.54 (1,482.01)Net Increase/ (Decrease) in cash and cash equivalents (A+B+C) (119.54) (66.10)Opening balance of cash and cash equivalents 626.30 692.40Closing balance of cash and cash equivalents 506.76 626.30

(Rupees in Lacs)

Signature to schedules 1 to 22 and Balance Sheet abstract.In terms of our Audit Report of even date:For KALANI & COMPANY R.L. TOSHNIWAL RAKESH MEHRAChartered Accountants Chairman & Managing Director Wholetime DirectorFRN - 00722C




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FORM- A

FORM FOR DISCLOSURE OF PARTICULARS WITHRESPECT TO CONSERVATION OF ENERGY

A. POWER AND FUEL CONSUMPTIONS.No.Particulars Current Year Previous Year

2009 -2010 2008 -2009

1. Electricity

a ) Purchased Units 2,35,91,884 1,05,04,847

Total Amount (Rs.) 11,45,11,693 5,19,03,460

Rate/Unit 4.85 4.94

b ) Own generation

i) Through Coal based

Thermal Power plant Unit 11,27,33,138* 11,30,28,300*

Units per Kg. of Coal 1.118 1.035

Cost/Unit 3.11 3.92

ii) Through Furnace Oil

Generator unit 2,91,90,418 1,73,10,903

Units per Kg. of Furnace Oil 4.29 4.29

Cost/Unit 4.85 4.12

iii) Through Diesel Generator unit 72,836 57,998

Units per Ltr.of Diesel Oil 2.98 2.90

Cost/Unit 11.70 12.87

2. Coal Qty.(MT) 1,05,925 1,15,650

Total cost (Rs.) 37,05,97,148 46,31,09,101

Average rate/MT(Rs.) 3,499 4,004

3. Lignite Qty.(MT) 14,495 9,377

Total cost (Rs.) 2,82,35,409 2,99,71,649


4. Petcoke Quantity (MT) 5,731 5,764

Total cost (Rs.) 3,19,17,299 2,87,62,594


5. LPG Quantity (MT) 619.64 465.32

Total cost (Rs.) 2,31,01,034 1,91,19,936


6. Furnace Oil Qty.(Kgs.) 70,20,562 41,61,699

Total Amount (Rs.) 14,39,55,492 7,31,25,255

Average Rate/Kg.(Rs.) 20.50 17.57

7. Diesel Qty. ltrs. 54,072 87,815

Total Amount(Rs.) 17,56,605 29,10,755

Average Rate/Ltr.(Rs.) 32.49 33.15

8. Other/Internal generation Not applicable Not applicable

* Including 2944900 KWH given to Carreman Fabrics IndiaLtd. for job weaving done for the Company (Previous year4130790 KWH)

B. CONSUMPTION PER UNIT OF PRODUCTIONPower facility is common for production of cloth and yarn;accordingly, such information for each product is not available.


ANNEXURE-II TO DIRECTORS’ REPORTAdditional information as required under the Companies(Disclosure of particulars in the report of Board ofDirectors) Rule,1988.

A. CONSERVATION OF ENERGY:a) Energy Conservation measures taken.

Lighting1) Placing new type of reflectors around 500 nos.

on tube lights, found gain in lux level by 30%,saving power and improving lux on machines.

2) Replacing around 350 GFL lamps by of CFLlamps in all residential area saving around10.05 KW per hour.

MachinesBy continuous monitoring and attending, high powerconsuming machines, 1% power saving achievedin Carding/TFO and Ring Frame departments.CompressorInstalled Electro–pneumatic IGV control on 1 No.Centac Air Compressor saving 100KW of power perhour.

b) Addi t ional investment and proposal beingimplemented for reduction of consumption ofenergy.Replacement of old motors by new technologymotors at a cost of around Rs.50 lacs.

c) Impact of the measures at (a) and (b) above forreduction of energy consumption and consequentimpact on the cost of production of goods.Marginal impact on overall cost of production.

d) T o t a l e n e r g y c o n s u m p t i o n a n d e n e r g yconsumption per unit of production in respect ofIndustries specified in the schedule thereto.

As per form ‘A’ enclosed.

B. TECHNOLOGY ABSORPTION:Efforts made in technology absorption.

As per form ‘B’ enclosed.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO :The activities relating to exports, initiatives taken toincrease exports, development of new export marketfor products and services and export plans have beendiscussed under the head “Exports” in the main bodyof the Directors Report.The information in respect of Foreign Exchangeoutgoing and earning is contained in item 12(B)(d) &(e) in Schedule 22 annexed to the Balance Sheet as at31st March, 2010.

(48)

FORM - B

FORM FOR DISCLOSURE OF PARTICULARS WITHRESPECT TO TECHNOLOGY ABSORPTION 2009-2010

RESEARCH AND DEVELOPMENT (R & D)1. Speci f ic areas in which R & D carr ied out by the

Company.The Company has set up a world class fabric testinglaboratory as per ISO, AATCC, ASTM, LS & Co, M & S, etc.testing protocol. The laboratory has successfully achievedaccreditation of Levis & Co, Marks & Spencer and isundergoing ISO 17025 NABL and Coach accreditation.The laboratory is providing on line testing services tovarious departments to achieve excellent quality andproductivity.The Company has well developed fabric designingdepartment and has created a garment studio at Mumbaifor improvement in fabric and garment designs. TheCompany has also procured computer software to createand develop new designs for manufacturing Jacquardfabrics.The Company has imported Chinese spinning andweaving machines, which are cheaper than LMW/Indianmachines.

2. Benefits derived as a result of the above R & DAs the result of the above efforts, the products of theCompany are meeting international quality standards andare, therefore, globally well accepted. The fabric samplecan be tested in the Company’s laboratory as percustomers’ requirement/ international standards therebysaving time and cost. Earlier, the sample used to be sentoutside Testing Labs, incurring extra time and cost.During the year, the Company purchased worstedspinning plant and other machines for expansion andmodernization at competitive prices. The delivery periodof these machines was also much lower in comparison.The Company has wel l equipped design anddevelopment facilities; it has also established technicaltextile fabric section and is regularly supplying goodquality of technical textile fabric to a well reputed brandsin USA.

3. Future plans and actionResearch and development is a continuous process. TheCompany is going to add new testing equipment for allwool and wool mixed fabrics and upholstery fabrics.The Company is developing various types of technicaltextile fabrics, with latest technology, to be supplied to

institutional bodies like Defense, Railways, Airlines,Luxury Traveling Coaches etc. During thesedevelopments, the laboratory is also being expanded withlatest testing equipments for the testing of technical fabrics.For the garment division, the Company has importedJackets stitching machinery which has been installed ingarment factory at Surat.

4. Expenditure on R & Da) Capital expenditure is approx. Rs.165 lacs.b) Recurring – Normal running expenditure Rs.119 lacs.c) Total Rs.284 lacs.d) Total R & D expenditure as a percentage of total

turnover is less than 1%

TECHNOLOGY ABSORPTION, ADOPTION ANDINNOVATION1. Efforts, in brief, made towards technology absorption,

adoption and innovation.The Company deputes its technicians to various otherweaving and finishing units within and outside India tounderstand the improvements in the respective areas. TheCompany started lamination of coated fabric and technicaltextile fabric in-house, which is a new production activityfor the Company. The Company engaged the services oftechnicians from abroad and upgraded the cotton yarndyeing quality. For the wool dyeing also, Companyinstalled RF Dryer and improved this machine to producebetter quality end products. During the year, the Companystarted production of Jacquard fabric. It purchasedcomputer software for developing the fabric designs. Thein house testing laboratory was upgraded to theinternational standard.

2. Benefits derived as a result of the above efforts, e.g.product improvement, cost reduction, productiondevelopment, import substitution etc.The Company was depending on out side Yarn Dyer forCotton as well as texturised filament yarn dyeing. Theintroduction and gradual increasing the capacity of cotton/texturised filament yarn dyeing facility at Banswara, hasenabled Company to reduce the lead time. Now, it candeliver its products to the customers in about 15 days.

3. In case of imported technology (import during the last5 years reckoned form the beginning of the financialyear) the following information may be furnished.

Not applicable. For and on behalf of the Board

Place : Mumbai R. L. TOSHNIWALDated: 26th May, 2010 Chairman & Managing Director


BANSWARA SYNTEX LIMITEDRegd. Office: Industrial Area, Dohad Road, Banswara-327 001 (Raj.)

Dear Shareholder,SEBl, vide its letter No.DCC/FlTTCIR-3/2001 dated 15th October, 2001, has advised that all companies should mandatory

use Electronic Clearing System (ECS) facility for distributing dividends or other cash benefits to the investors whereveravailable. In the absence of availability of ECS facility, the companies may use warrants for distributing the Dividends.

Currently, ECS facility is available at locations specified by RBI. We request all the shareholders to give their bankdetails so that all future Dividend payments can be remitted through ECS In case of shareholders staying at locations notcurrently covered by ECS, the bank account details will be used for suffixing along with the name of the shareholder on thedividend warrants issued in future.

J.K. JAINSr. Vice President ( F&C)

& Company Secretary

ECS MANDATE FORM(For use by Shareholders holding Shares in physical mode only)

Banswara Syntex Limited.Industrial Area, Dohad RoadBANSWARA-327 001 (RAJ.)Dear Sirs,Change in mode of payments to Electronic Clearing System (ECS)I hereby consent to have the amount of Dividend on my equity shares credited through the Electronic Clearing System (CreditClearing) [ECS]. The particulars are:1. Folio No. : __________________

[Folio No. given in equity share certificate(s)]2. Member's Name: Mr./Ms. : __________________________________________3. Member's address : __________________________________________4. Particulars of the Bank A/C :

* Bank name : __________________________________________* Branch name : __________________________________________* Mention the 9-digit code number of the bank andbranch appearing on the MICR cheque issued by the bank : __________________________________________(Please attach a photocopy of a cheque or a blank cancelled cheque issued by your bank for verifying the accuracy ofthe code number)

* Account type (please) Savings Current Cash Credit* Account number (as appearing on the cheque book) : _____________________I hereby declare that the particulars given above are correct and complete. If the transaction is delayed or not effected at all forreasons of incomplete or incorrect information for any reasons, I would not hold the Company responsible. I also undertake toadvise changes, if any, in the particulars of my account to facilitate updation of records for purposes of credit of Dividendamount through ECS.

Signature of the first named/sole MemberNote:1. Please complete the form and send it to the Company if you are holding share certificate(s) in physical form.2. IN CASE YOUR SHARES ARE IN DEMATERALISED FORM, INFORM/UPDATE YOUR INFORMATION DIRECTLY WITH THE DEPOSITORY PARTICIPANT (DP) WITH WHOM YOU ARE MAINTAINING DEMAT ACCOUNT AND NOT TO THE COMPANY.3. In case of more than one Folio please complete the details on separate sheets.4. Payment through ECS is subject to the rules and regulations of the Scheme of ECS of the Reserve Bank of India from time to time.

Place : ___________

Date :

BANSWARA SYNTEX LIMITED Regd. Office : Industrial Area, Dohad Road, BANSWARA-327 001(Raj.)

PROXY FORM

Regd. Folio No. / DPID & Client ID No. 34th Annual General Meeting

I/We_______________________________________________________________________________________

of______________________________________________________________________________in the District of

____________________________________being a member /members of the above named Company hereby appoint

Mr./Ms.___________________________________of______________________________________in the district of

________________________________________or failing him _______________________________________of

_________________________________________ in the district of_____________________________________

as my/our proxy to vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held at3.30 P.M. on Wednesday, the 11th August, 2010 and at any adjournment thereof.

Signed this day ___________________________of_____________________________________________2010

Signature___________________

Note : This form in order to be effective should be duly filled and signed across stamp and must be deposited at theRegistered Office of the Company, not less than 48 hours before the meeting.

BANSWARA SYNTEX LIMITEDRegd.Office: Industrial Area, Dohad Road, BANSWARA-327 001(Raj.)

ATTENDANCE SLIP34th Annual General Meeting

Regd Folio No. / DPID & Client ID No.

I certify that I am a registered shareholder /proxy for the registered shareholder of the Company.

I hereby record my presence at the Annual General Meeting of the Company at 3.30 P.M. on Wednesday, the11th August, 2010 at the Company’s Registered Office.

____________________________________ ________________________________

Member’s/Proxy’s name in BLOCK Letters Member’s/Proxy’s Signature

Note : Please fill in this attendance slip and hand it over at the ENTRANCE.Members are requested to bring their copy of Annual Report to the meeting.

AFFIX1 Rupeerevenuestamp

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